| A | B |
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| The policy and a copy of a application along with any riders or amendments constitutes what? | The entire contract |
| What is the mode (in terms of payment of premium)? | the manner or frequency that the policyowner pays the policy premiums |
| Define: Grace Period | Period of time after the premium due date that the policyowner has to pay the premium before the policy lapses |
| What is the purpose of the grace period? | Protect the policyholder against unintentional lapse of the policy. |
| What is the maximum reinstatement time after the policy has lapsed? | 3 years |
| What happens if the applicant misstates his/her age? | pay the benefits in the amount that the premium at the correct age would have otherwise purchased |
| What is a representation? | Written response to questions or statements made on an application for insurance, which the policy relies upon |
| How long does a person have to file a claim? | 2 years |
| How long must the insurer pay a submitted claim? | 2 months |
| Define: Policyowner | the individual who has all the ownership rights, including the responsibility of paying the policy premiums |
| What is the assignment provision? | specifies the policyowners right to assign, transfer rights of ownership |
| What is Absolute Assignment? | Involves transferring ALL RIGHTS of OWNERSHIP |
| What is collateral assignment? | transferring PARTIAL rights to another person |
| How long does the policyowner have to look over the policy and if disatisfied return it? | 10 days |
| What are exclusions? | exclusions in which the insurer will not provide coverage. |
| Give some examples of exlusions | Aviation clause, hazardous occupation or hobbies clause, war or military service clause |
| What is the PER CAPITA designation | means ' by the head' |
| What is the PER STRIPES designation? | means 'by the bloodline' |
| If no beneficiaries are named where will the funds go to? | The insureds estate |
| Define: Primary Beneficiary | has first claim to the policy proceeds |
| Define: Secondary Beneficiary | Has second claim in the event that the primary beneficiary dies before the insured |
| Define: tertiary beneficiary | is third in line for the death benefits |
| What is the spendthrift clause? | prevents the beneficiary from reckless spending of policy benefits by paying them in fixed amounts/ installments |
| What is the interest only option? | the insurance company retains the policy proceeds and pays interest on the proceeds to the recepients at regular intervals |
| Define: Fixed Amount Option | pays a fixed, specified amount in installments until the proceeds are exhausted |
| Define: Life Income Option | Provides the receipent with an income that he or she cannot outlive |
| Define: Single Life Option | Can provide a single beneficiary income for the rest of his/her life, until the death in which the benefits will cease. |
| Define: Life Income Joint and Survivor | option gurantees an income for two or more receipends for as long as they live |
| What is a surrender charge? | A fee charged to the insured when a policy or annuity is surrenders for its cash value |
