Life Insurance Policy Provisions, Options, and Riders
What does a spendthrift clause in a life insurance settlement do?
Answer and explanation
Answer: C. The clause prevents the beneficiary from commuting, assigning or encumbering instalments still held by the insurer and puts them beyond the reach of the beneficiary's creditors. It does not cap spending, permit reductions, or compel a trust.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, spendthrift clause
More life insurance policy provisions, options, and riders questions
- How is the interest paid under the interest only settlement option treated for tax?
- How is the lump sum paid under the cash settlement option treated for federal income tax?
- How may an accelerated payment of the death benefit be provided under New York law?
- 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?
621 New York questions like this one.
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