Policy Riders, Provisions, Options, and Exclusions
Which condition does federal guidance describe for the terminal illness exclusion for accelerated death benefits?
Answer and explanation
Answer: A. IRS Publication 525 describes the terminal illness exclusion by reference to a condition expected to result in death within 24 months, and separately describes a chronic illness exclusion covering inability to perform activities of daily living or severe cognitive impairment requiring substantial supervision. Hospitalisation length, exhausted coverage, and insurer-employed certifiers are not the stated tests.Source: IRS Publication 525 — Publication 525, Terminal and chronic illness
More policy riders, provisions, options, and exclusions questions
- An insurer tries to add an aviation exclusion after issue even though no aviation risk was disclosed or identified during underwriting. How does that compare with the Compact standard?
- An insurer wants to rely on a company underwriting manual to deny a claim, although the manual was never attached to the policy. What does the entire contract provision mean for that argument?
- An owner adds a spouse term rider to a base whole life policy. How is coverage structured for the spouse?
- An owner creates a trust for minor children and names the trust as policy beneficiary. What is the trustee's relevant role after the insured's death?
- An owner names 'my children, per stirpes.' One child dies before the insured but leaves two children. What result is the designation intended to produce?
- An owner signs a policy assignment before the insurer receives notice. The insurer takes an allowed action without knowledge of it. Under the Compact standard, how is the timing handled?
589 Florida questions like this one.
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