Life Insurance Policy Provisions, Options, and Riders
Which three nonforfeiture options does a permanent policy customarily make available?
Answer and explanation
Answer: D. The nonforfeiture options are cash surrender, reduced paid-up insurance and extended term insurance, each a way of taking the value the owner has built. Accumulation at interest, paid-up additions, one-year term and reduction of premium are dividend options, while loans and waiver are separate provisions.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, nonforfeiture options
More life insurance policy provisions, options, and riders questions
- How is the amount of cover under a family term rider usually expressed?
- How is the interest credited under the accumulation at interest dividend option treated for tax?
- 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?
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