Life Insurance Policy Provisions, Options, and Riders
Interest credited on the retained proceeds exceeds the guaranteed rate under a fixed-amount option. What is the effect?
Answer and explanation
Answer: C. Because the amount of each payment is fixed, additional interest lengthens the time the fund lasts rather than raising the instalment. Under the fixed-period option the same excess interest would raise the payment instead.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, fixed amount option
More life insurance policy provisions, options, and riders questions
- Who may elect a settlement option other than cash payment, and when may that election be made?
- Whom does a spouse or other-insured term rider cover, and for how long?
- Why does a life income option pay a younger payee less each month than an older payee for the same proceeds?
- Why does the one-year term dividend option produce more death benefit per dividend dollar than paid-up additions?
- Why is a dividend on a participating life policy generally not taxable to the owner?
- Why is naming a minor directly as beneficiary of a life policy usually discouraged?
621 New York questions like this one.
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