Life Insurance Policy Provisions, Options, and Riders
Is an owner obliged to repay a policy loan, and what follows from leaving it outstanding?
Answer and explanation
Answer: A. There is no repayment schedule, but interest continues to accrue and is added to the debt, and the policy may lapse once the loan with interest reaches the cash value. Interest does not stop after a year, and no instalment obligation arises.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, policy loans
More life insurance policy provisions, options, and riders questions
- An insured's health has deteriorated badly since issue. How does that affect the purchase of paid-up additions?
- An owner has relied on the automatic premium loan for several years running. What is the consequence?
- An owner stops paying premiums on a whole life policy and elects nothing. What does the policy generally do with the cash value?
- An owner takes a partial surrender in the fourth policy year of a universal life contract. What should be expected?
- An owner wants the original permanent insurance plan to continue for a smaller amount with no further premiums. Which nonforfeiture option fits?
- An owner wants to replace a named irrevocable beneficiary with someone else. What additional requirement applies?
621 New York questions like this one.
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