Policy Riders, Provisions, Options, and Exclusions
The insured is not the owner of a cash-value life policy. The insured asks to take a policy loan without the owner's authorization. Which response best reflects the parties' roles?
Answer and explanation
Answer: A. Control over policy loans and cash-value access belongs to the policyowner, not automatically to the insured. When the parties differ, the insured cannot exercise an ownership right merely because the policy covers that person's life.Source: National Association of Insurance Commissioners — Life Insurance Beneficiaries: Per Capita vs. Per Stirpes — Parties to a life insurance policy: owner controls changes, loans, withdrawals, and options
More policy riders, provisions, options, and exclusions questions
- A terminally ill insured accelerates part of a policy's death benefit. What should the beneficiary expect at the insured's later death?
- A Texas individual life premium is overdue, but the insured dies during the policy's usual 31-day grace period. What is the usual claim result?
- A Texas life policy has remained in force for more than two years. A claim is filed based on information from the original application. What is the ordinary effect of the incontestability period?
- A universal life owner wants to vary the timing and amount of premium payments. Which condition remains essential?
- A universal life policy carries a waiver of monthly deduction rider. How does that rider differ from a standard waiver of premium rider?
- A variable life owner takes a policy loan and leaves it outstanding. Which effect should the owner expect?
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