Life Insurance Policy Provisions, Options, and Riders
How does waiver of cost of insurance differ in effect from waiver of premium on a fixed whole life policy?
Answer and explanation
Answer: D. The two riders fit the two designs: a flexible premium policy needs its internal deductions covered, a fixed premium policy needs the premium itself paid. Both usually turn on total disability and a waiting period, and neither pays cash to the owner.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, waiver of cost of insurance
More life insurance policy provisions, options, and riders questions
- If a cash-value policyowner stops paying premiums and selects the extended term nonforfeiture option, what coverage is provided?
- If a traditional policy uses the amount-purchased method for a misstated age, what is adjusted?
- In the succession of beneficiaries, who receives the death benefit if the primary beneficiary has died before the insured?
- In what order are withdrawals from a universal life policy that is not a modified endowment contract generally taxed?
- Interest credited on the retained proceeds exceeds the guaranteed rate under a fixed-amount option. What is the effect?
- Is an owner obliged to repay a policy loan, and what follows from leaving it outstanding?
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