6/11/2020 Quiz: Options

 FLORIDA HEALTH, LIFE AND ANNUITY

Question 1 All of the following are nonforfeiture options, EXCEPT:

Select one:
a. Cash surrender value
b. Reduced paid-up insurance
c. Accumulate at interest
d. Extended term

LH75002
Your answer is correct
Accumulate at interest is a dividend option.
The correct answer is: Accumulate at interest

Question 2 All of the following are true regarding the reduced paid-up
insurance nonforfeiture option for life insurance policies, EXCEPT:

Select one:
a. With the reduced paid-up insurance option, the policy may
be reinstated to the original face amount within the terms of
the reinstatement provision.
b. Any outstanding policy loans plus interest would be
deducted from the cash surrender value prior to purchasing
reduced paid-up insurance.
c. The reduced paid-up insurance option allows the
policyowner to purchase paid-up term coverage at a reduced
face amount based on the amount of the policy cash value.

1/7
6/11/2020 Quiz: Options
d. The cash values act as a single premium to purchase
reduced paid-up insurance.

LH75022
Your answer is incorrect
The reduced paid-up insurance option allows the policyowner to
purchase paid-up whole life coverage at a reduced face amount
based on the amount of the policy cash value.
The correct answer is: The reduced paid-up insurance option
allows the policyowner to purchase paid-up term coverage at a
reduced face amount based on the amount of the policy cash
value.

Question 3 Which dividend option allows the policyowner to use the dividend
to offset the cost of a future premium payment?

Select one:
a. Reduction of premium payments

b. Accumulation at interest
c. One-year term

d. Paid-up additions

LH75030
Your answer is correct
The reduction of premium payments option allows the
policyowner to use the dividend to offset the cost of a future
premium payment.
The correct answer is: Reduction of premium payments

2/7
6/11/2020 Quiz: Options

Question 4 Life insurance policies that pay dividends are referred to as

"participating policies". Participating policies pay dividends to

policyholders. Which of the following is a true statement about

dividends?

Select one:
a. Dividends are not taxable.
b. Dividends are usually paid on an annual basis.

c. Dividends are actually a return of overcharged premiums.

d. All of the above

LH75026
Your answer is correct

Dividends are not taxable, are usually paid once a year, and are really

a return of overcharged premiums.

The correct answer is: All of the above

Question 5 Extended term is another option of the nonforfeiture provision. If

Clarice opts to no longer pay the premiums on her $100,000
whole life policy and exchanges it for an extended term policy,
what will be the face value of the term insurance policy?

Select one:
a. $10,000
b. $25,000

c. $50,000
d. $100,000

LH75018
Your answer is correct
3/7
6/11/2020 When Clarice exchanges her whole
Quiz: Optionslife policy for an extended

term policy the amount of term insurance is equal to the original

policy amount.
The correct answer is: $100,000

Question 6 If used, this nonforfeiture option does not allow the policyowner
to reinstate the original policy:

Select one:
a. All nonforfeiture options
b. Cash surrender value

c. Extended term
d. Reduced paid-up

LH75010
Your answer is correct
The extended term and reduced paid up nonforfeiture options
allow the policyowner to reinstate the original policy because
coverage is still in effect. However, the cash surrender option
does not allow the policy to be reinstated because the policy has
been surrendered for its cash value, and no coverage remains.
The correct answer is: Cash surrender value

Question 7 Some policies offer the policyholder the opportunity to purchase

additional insurance when they get married, or have children.
What is the factor that determines the rate of the additional
coverage?

Select one:
a. The initial date of the policy
b. The attained age of the insured when the additional
insurance is purchased
4/7
6/11/2020 Quiz: Options
c. The exclusion of a waiver of premium rider
d. The reason for wanting the additional insurance

LH75038
Your answer is correct
The attained age of the policyholder determines the rate when
additional insurance is purchased. The date of the policy and
existence of other riders is not relevant for determining the rate.
The correct answer is: The attained age of the insured when the
additional insurance is purchased

Question 8 The automatic dividend option is:

Select one:
a. Paid-up additions
b. Cash payment
c. One-year term
d. Paid-up insurance

LH75034
Your answer is correct
If the policyowner does not inform the insurer how they would
like to receive the dividend, the insurer will automatically use the
paid-up additions option.
The correct answer is: Paid-up additions

Question 9 Which of the following provisions allows a life insurance policy to

continue beyond the grace period when a premium is overdue
and not paid?

Select one:
a. Assignment clause 5/7
6/11/2020 Quiz: Options
b. Nonforfeiture option

c. Consideration clause
d. Insuring clause

LH75006
Your answer is correct
When a life insurance policy premium is not paid and the grace
period has lapsed, the extended term and reduced paid-up
insurance nonforfeiture options allow coverage to continue.
The correct answer is: Nonforfeiture option

Question 10 When the extended term option is used, the face amount is:

Select one:
a. Equal to the original coverage
b. Lower than the original coverage
c. Higher than the original coverage
d. The amount the cash value can purchase for the extended
policy term

LH75014
Your answer is correct
The cash value acts as a single premium to purchase the
extended term coverage, and the amount of the paid-up
coverage is equivalent to the original policy's face value.
The correct answer is: Equal to the original coverage

Finish Review

https://lms.licensecoach.com/mod/quiz/review.php?attempt=3925781 6/7