Policy Riders, Provisions, Options, and Exclusions
Which exchange describes consideration in a life insurance contract?
Answer and explanation
Answer: B. The policyowner provides consideration through the premium and application statements, while the insurer provides its contractual promise to pay covered benefits. The NAIC buyer's guide describes life insurance as a death-benefit promise in exchange for premiums.Source: National Association of Insurance Commissioners — Life Insurance Buyer's Guide — PDF page 3, Understand What Life Insurance Is
More policy riders, provisions, options, and exclusions questions
- Which premium mode results in the lowest total annual premium outlay for a life policy?
- Which statement about dividends on a participating whole life policy is correct?
- Why is naming a minor child directly as a life insurance beneficiary problematic?
- A beneficiary asks which part of the policy states the insurer's core promise to pay. Which provision should the producer point to?
- A beneficiary selects a straight life-income settlement. Which tradeoff is most important?
- A beneficiary wants equal installments of proceeds and interest for a selected number of years. Which settlement option fits?
590 Texas questions like this one.
Every answer explained, the ones you miss come back on a spaced schedule, and a plan built from your exam date.