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CIC Life & Health practice questions

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Question 1Life and Annuity Policies

Under a level premium term life policy, which statement best describes the relationship between the premium and the death benefit during the term?

  1. The premium increases each year while the death benefit stays level
  2. The premium stays constant while the death benefit stays level Correct answer.
  3. The premium stays constant while the death benefit decreases each year
  4. Both the premium and the death benefit increase each year

Explanation

Level term insurance is defined by a premium that remains fixed for the stated term and a face amount that does not change. This predictability is the primary reason consumers choose level term for needs such as mortgage or income replacement.

Question 2Life and Annuity Policies

A whole life policy's cash value grows on a tax-deferred basis. Which policy feature directly explains why cash value eventually equals the face amount at maturity?

  1. The endowment at age 100 (or maturity) provision Correct answer.
  2. The renewable provision
  3. The grace period provision
  4. The reinstatement provision

Explanation

Traditional whole life is structured so the cash value accumulates until it equals the face amount at the maturity age, at which point the policy endows and the face amount is paid. This is why whole life is sometimes described as permanent coverage with a guaranteed savings element.

Question 3Life and Annuity Policies

Which dividend option under a participating whole life policy produces the greatest immediate increase in death benefit without requiring evidence of insurability?

  1. Cash payment
  2. Premium reduction
  3. Accumulate at interest
  4. Paid-up additions Correct answer.

Explanation

Paid-up additions use the dividend to purchase a small amount of additional permanent insurance at the dividend date, increasing both death benefit and cash value immediately with no underwriting. The other options either reduce cost or accumulate funds rather than add coverage.

Question 4Life and Annuity Policies

An insured dies during the grace period after failing to pay a premium. What is the insurer's typical obligation?

  1. Pay only the cash value
  2. Pay the face amount less any overdue premium Correct answer.
  3. Pay nothing because the policy lapsed on the due date
  4. Pay the face amount plus a penalty for late payment

Explanation

Coverage remains in force during the grace period, so a covered death is payable. The insurer normally deducts any unpaid premium from the proceeds rather than denying the claim.

Question 5Life and Annuity Policies

A policyowner wants to stop paying premiums on a whole life policy but keep a smaller amount of permanent coverage in force. Which nonforfeiture option accomplishes this?

  1. Extended term
  2. Reduced paid-up insurance Correct answer.
  3. Policy loan
  4. Automatic premium loan

Explanation

The reduced paid-up option converts the existing cash value into a smaller face amount of permanent insurance that requires no further premiums. It differs from extended term, which keeps the original face amount but only for a limited period.

Question 6Life and Annuity Policies

Which provision prevents an insurer from contesting a policy for material misrepresentation after a specified period?

  1. Entire contract clause
  2. Free look provision
  3. Incontestability clause Correct answer.
  4. Misstatement of age provision

Explanation

The incontestability clause bars the insurer from rescinding coverage for misrepresentation after the policy has been in force for a stated period, typically two years. It protects beneficiaries from surprise denials based on application errors.

Question 7Life and Annuity Policies

An annuitant elects a life annuity with a 10-year certain period and dies after receiving payments for four years. What happens to the remaining payments?

  1. They continue to the named beneficiary for six more years Correct answer.
  2. They are paid as a lump sum of the full original annuity value
  3. They are forfeited to the insurer
  4. They stop because the annuitant's life has ended

Explanation

A period-certain feature guarantees that payments continue for the stated minimum period even if the annuitant dies early. Here six years of payments remain and go to the beneficiary.

Question 8Life and Annuity Policies

Which annuity payout option generally provides the largest monthly income for a single annuitant of a given age and account value?

  1. Joint and survivor
  2. Straight life income Correct answer.
  3. Life with 20-year certain
  4. Installment refund

Explanation

Straight life pays for as long as the annuitant lives and stops at death, with no guarantee to survivors. Because the insurer bears no residual payment obligation, it produces the highest periodic income of the listed options.

Question 9Life and Annuity Policies

During the accumulation phase of a fixed deferred annuity, how is the interest credited to the contract typically characterized?

  1. It is taxed as capital gains when credited
  2. It grows tax-deferred until withdrawn or annuitized Correct answer.
  3. It is taxable to the owner each year as credited
  4. It is never subject to income tax

Explanation

Fixed deferred annuities credit interest that accumulates tax-deferred, meaning the owner is not taxed annually on inside buildup. Taxation generally occurs when funds are withdrawn or payments begin, and gains are then taxed as ordinary income.

Question 10Life and Annuity Policies

An owner surrenders a non-qualified deferred annuity that has a surrender charge schedule. Which charge applies in the first contract year?

  1. A flat federal penalty equal to 10 percent
  2. Only a market value adjustment
  3. No surrender charge because the contract is new
  4. The highest scheduled surrender charge Correct answer.

Explanation

Surrender charge schedules typically start at their highest percentage in the early contract years and grade down to zero over time. This recovers acquisition costs and discourages early withdrawal.

Question 11Life and Annuity Policies

An annuitant begins receiving payments from a non-qualified annuity at age 62. How is the taxable portion of each payment determined?

  1. The exclusion ratio applies, excluding a portion representing basis Correct answer.
  2. The entire payment is tax-free
  3. The entire payment is taxable
  4. Only amounts above the original deposit are taxable in full

Explanation

For annuitized non-qualified contracts, the exclusion ratio allocates each payment between return of after-tax basis and taxable earnings. The basis portion is excluded until it is fully recovered.

Question 12Life and Annuity Policies

Which life insurance policy type allows the owner to vary premium payments and adjust the death benefit within limits, with cash value invested in a separate account?

  1. Traditional whole life
  2. Decreasing term life
  3. Variable universal life Correct answer.
  4. Level term life

Explanation

Variable universal life combines flexible premiums and adjustable death benefits with cash value held in separate accounts whose value fluctuates with subaccount performance. The owner bears the investment risk.

Question 13Life and Annuity Policies

A universal life policy's cost of insurance is deducted monthly from the policy's account value. If the account value falls to zero while the policy is still within its no-lapse guarantee period, what typically happens?

  1. The insurer bills the beneficiary for the shortfall
  2. The death benefit is reduced to the account value
  3. The policy immediately terminates
  4. The policy remains in force under the no-lapse guarantee Correct answer.

Explanation

A no-lapse guarantee keeps the policy in force even if the account value is depleted, provided the guaranteed premium requirements have been met. Without such a guarantee, the policy could lapse when the account value cannot cover charges.

Question 14Life and Annuity Policies

Which rider pays a benefit when the insured is diagnosed with a qualifying terminal illness and generally accelerates part of the death benefit?

  1. Waiver of premium rider
  2. Guaranteed insurability rider
  3. Accidental death rider
  4. Accelerated death benefit rider Correct answer.

Explanation

An accelerated death benefit rider allows the insured to receive a portion of the face amount early upon a qualifying terminal or chronic illness. The remaining death benefit is reduced accordingly.

Question 15Life and Annuity Policies

A policyowner with a guaranteed insurability rider wants to purchase additional coverage at an option date. What is required?

  1. A new medical examination and blood test
  2. Surrender of the existing policy
  3. Payment of the premium for the additional coverage at the attained age Correct answer.
  4. Evidence of insurability satisfactory to the insurer

Explanation

The guaranteed insurability rider allows the owner to buy specified amounts of additional coverage at stated ages or events without proving insurability. The owner must pay the premium based on the attained age.

Question 16Life and Annuity Policies

Which party holds the rights to change the beneficiary, take policy loans, and surrender a life insurance policy?

  1. The beneficiary
  2. The insurer
  3. The policyowner Correct answer.
  4. The insured

Explanation

The policyowner holds the contractual rights to the policy, including beneficiary designation, loans, and surrender, unless ownership has been assigned otherwise. The insured and beneficiary may be different people with no ownership rights.

Question 17Life and Annuity Policies

An irrevocable beneficiary has been named on a life policy. What is required for the owner to change that beneficiary?

  1. Approval from the state insurance department
  2. A new medical examination
  3. The irrevocable beneficiary's written consent Correct answer.
  4. Nothing beyond notifying the insurer

Explanation

An irrevocable designation gives the beneficiary a vested interest, so the owner cannot change it without that beneficiary's written consent. A revocable designation, by contrast, can be changed freely by the owner.

Question 18Life and Annuity Policies

A policy names the insured's spouse as primary beneficiary and the insured's estate as contingent beneficiary. The spouse dies before the insured. Who receives the proceeds at the insured's death?

  1. The insured's children automatically
  2. The spouse's estate
  3. The insurer retains the proceeds
  4. The insured's estate Correct answer.

Explanation

When the primary beneficiary predeceases the insured, the contingent beneficiary named in the policy receives the proceeds. Here that is the insured's estate, which may create probate and creditor exposure.

Question 19Life and Annuity Policies

Which settlement option pays the beneficiary a guaranteed income for life, with any unpaid guaranteed amount continuing to a secondary payee?

  1. Interest only
  2. Fixed period
  3. Lump sum
  4. Life income with period certain Correct answer.

Explanation

Life income with period certain guarantees payments for the beneficiary's lifetime and, if death occurs before the certain period ends, continues payments to a successor payee. This balances lifetime income with a minimum payout guarantee.

Question 20Life and Annuity Policies

An insured under a disability income policy with a 90-day elimination period is disabled for 120 days. For how many days are benefits payable?

  1. 120 days
  2. 30 days Correct answer.
  3. 0 days
  4. 90 days

Explanation

The elimination period is a waiting period during which no benefits are paid. Benefits begin after 90 days, so only the remaining 30 days of the 120-day disability generate payment.

Question 21Life and Annuity Policies

Which life insurance underwriting classification is assigned to a proposed insured with a significant health impairment that requires an extra mortality charge?

  1. Substandard Correct answer.
  2. Standard
  3. Preferred
  4. Declined

Explanation

Substandard (rated) classifications apply when an applicant presents higher-than-average mortality risk, and the insurer charges an extra premium or imposes a rating. Preferred and standard classes reflect average or better risk.

Question 22Life and Annuity Policies

A life policy is issued with a conditional receipt. The proposed insured dies before the policy is delivered, and the insurer later determines the applicant was insurable as a standard risk on the application date. What is the insurer's obligation?

  1. Pay half the face amount as a compromise
  2. Pay the death benefit because coverage was effective under the conditional receipt Correct answer.
  3. Refund only the initial premium
  4. Deny the claim because the policy was never delivered

Explanation

A conditional receipt provides coverage retroactive to the application or medical exam date if the proposed insured was insurable under the insurer's rules. Since the applicant qualified as a standard risk, the claim is payable.

Question 23Life and Annuity Policies

What is the primary purpose of the free look provision in a life insurance policy?

  1. To allow the insurer to cancel within a set period
  2. To give the agent time to deliver the policy
  3. To let the owner return the policy for a full premium refund within a stated period Correct answer.
  4. To permit the owner to skip the first premium

Explanation

The free look provision gives the policyowner a set number of days after delivery to examine the contract and return it for a refund of premiums paid. It protects consumers from buying coverage they do not understand or want.

Question 24Life and Annuity Policies

A whole life policy with a $100,000 face amount has a $30,000 cash value and a $10,000 outstanding policy loan. The insured dies. Ignoring interest, what amount is payable to the beneficiary?

  1. $90,000 Correct answer.
  2. $70,000
  3. $100,000
  4. $60,000

Explanation

Policy loans are deducted from the death benefit at the insured's death. The face amount of $100,000 less the $10,000 loan yields $90,000, and the cash value is not separately added because the full face amount is paid.

Question 25Life and Annuity Policies

Which statement correctly describes the tax treatment of life insurance death benefits paid to a named beneficiary?

  1. They are taxable only if the beneficiary is a spouse
  2. They are taxed as ordinary income to the beneficiary
  3. They are generally received free of federal income tax Correct answer.
  4. They are subject to capital gains tax

Explanation

Death benefits paid because of the insured's death are generally excluded from the beneficiary's gross income for federal income tax purposes. Estate tax may still apply if the insured held incidents of ownership, which is a separate question from income tax.

Question 26Life and Annuity Policies

Under a level premium term life policy, what happens to the premium and the death benefit during the level term period?

  1. Both the premium and the death benefit are recalculated at each renewal
  2. Both the premium and the death benefit remain fixed for the stated term Correct answer.
  3. The death benefit decreases each year while the premium stays level
  4. The premium increases annually while the death benefit stays level

Explanation

Level term insurance keeps both the premium and the face amount constant for the length of the term, which is why it is often used to cover temporary needs such as a mortgage or child-raising years. The insurer assumes the risk of rising mortality cost during the term, so the premium does not climb year to year.

Question 27Life and Annuity Policies

Which characteristic distinguishes whole life insurance from term life insurance?

  1. Whole life provides coverage only for a stated number of years
  2. Whole life premiums are payable only while a mortgage balance exists
  3. Whole life can be renewed only with proof of insurability
  4. Whole life builds cash value and provides coverage for the insured's entire lifetime Correct answer.

Explanation

Whole life is permanent coverage: it remains in force for the insured's lifetime as long as required premiums are paid, and it accumulates a cash value that the owner can access. Term coverage, by contrast, is temporary and generally has no cash value.

Question 28Life and Annuity Policies

An insured dies during the grace period of a life policy while the premium for that period is still unpaid. How does the insurer typically handle the claim?

  1. Pay the face amount less any unpaid premium due Correct answer.
  2. Pay the full face amount with no deduction of any kind
  3. Pay only the policy's cash surrender value
  4. Deny the claim because the premium was not paid on time

Explanation

The grace period keeps the policy in force for a set number of days after the due date, so a death during that window is covered. Because the premium was never received, the insurer deducts the amount owed from the death benefit before paying the beneficiary.

Question 29Life and Annuity Policies

A policyowner stops paying premiums on a whole life policy that has accumulated cash value and does not elect another nonforfeiture option. Which option generally applies automatically?

  1. Automatic premium loan
  2. Extended term insurance Correct answer.
  3. Cash surrender
  4. Reduced paid-up insurance

Explanation

When a whole life policy lapses with cash value and no option has been chosen, the insurer typically applies extended term insurance automatically. This continues the original face amount for a limited period determined by the available cash value, with no further premiums due.

Question 30Life and Annuity Policies

Which dividend option allows a whole life policyowner to use dividends to buy additional permanent coverage of the same type as the base policy?

  1. Accumulate at interest
  2. Reduce premium
  3. Cash payment
  4. Paid-up additions Correct answer.

Explanation

Under paid-up additions, each dividend purchases a small amount of single-premium whole life coverage that increases both the death benefit and the cash value. Because the additions are fully paid, no further premiums are owed on them.

Question 31Life and Annuity Policies

A parent wants a juvenile life policy that allows the child, at a set age, to take over ownership and premium payments without new underwriting. Which policy design supports this?

  1. A juvenile policy with a transfer-of-ownership provision at a stated age Correct answer.
  2. A payor benefit rider on a term policy
  3. A group term certificate issued through the parent's employer
  4. A credit life policy tied to the parent's loan

Explanation

Juvenile policies commonly include a provision that transfers ownership and premium responsibility to the insured at a specified age, such as 21 or 25, without requiring evidence of insurability. This preserves the child's future insurability at the originally issued rate.

Question 32Life and Annuity Policies

What is the effect of a waiver of premium rider on a life insurance policy?

  1. It waives premiums during a qualifying total disability of the insured Correct answer.
  2. It refunds all premiums paid if the insured dies within the first year
  3. It pays the death benefit early when the insured becomes disabled
  4. It increases the face amount when the insured becomes disabled

Explanation

The waiver of premium rider keeps the policy in force by having the insurer pay the premiums during a qualifying disability, usually after an elimination period. The death benefit and cash value continue to grow as though premiums were being paid.

Question 33Life and Annuity Policies

An insured is diagnosed with a qualifying illness covered by an accelerated death benefit rider. What does the rider generally do?

  1. Pays a portion of the death benefit to the insured while still living Correct answer.
  2. Cancels the policy and returns all premiums paid
  3. Doubles the death benefit payable to the beneficiary
  4. Converts the policy into a term policy of equal face amount

Explanation

An accelerated death benefit lets the insured receive part of the policy's face amount early when a qualifying condition, such as terminal illness, is diagnosed. The remaining death benefit is reduced by the amount advanced and any charges.

Question 34Life and Annuity Policies

A policyowner names a beneficiary who is to receive income for life, with the remaining principal paid to the owner's children at that beneficiary's death. Which beneficiary designation does this describe?

  1. A revocable primary beneficiary
  2. An estate beneficiary
  3. A contingent beneficiary
  4. A life income beneficiary with a remainder interest Correct answer.

Explanation

A life income beneficiary receives only the income from the proceeds for life, while a named remainder beneficiary receives the principal afterward. This split arrangement requires careful drafting so the insurer knows who receives what and when.

Question 35Life and Annuity Policies

Which method of transferring ownership of an existing life policy to another person is a gift subject to gift tax rules?

  1. An absolute assignment for value
  2. A collateral assignment to a lender
  3. A policy loan taken by the current owner
  4. A change of owner with no consideration paid Correct answer.

Explanation

Transferring ownership of a life policy without receiving anything in return is an absolute assignment made as a gift, and the value of the policy counts toward gift tax reporting. Transfers for valuable consideration raise different income tax questions.

Question 36Life and Annuity Policies

A life insurance policy is owned by one spouse and insures the other spouse. Who must sign the application and generally consent to any change of beneficiary?

  1. The primary beneficiary, because the proceeds are payable to them
  2. The insurer's underwriter, because the insurer approves all changes
  3. The insured spouse, because the policy insures their life
  4. The owner spouse, because the owner holds all policy rights Correct answer.

Explanation

The owner holds the contractual rights to the policy, including the right to name or change beneficiaries, take loans, and surrender coverage. When the owner and the insured are different people, the owner signs the application and exercises these rights, although the insured's consent may be required in some circumstances.

Question 37Life and Annuity Policies

Which provision allows an insured to buy additional coverage at specified future dates without providing evidence of insurability?

  1. A cost of living rider
  2. A return of premium rider
  3. A long-term care rider
  4. A guaranteed insurability rider Correct answer.

Explanation

The guaranteed insurability rider lets the insured purchase stated amounts of additional coverage at option dates, regardless of health changes, at the insurer's rates then in effect. It protects future insurability that might otherwise be lost due to illness.

Question 38Life and Annuity Policies

An insured under a whole life policy pays premiums and also takes a policy loan. What is the effect of an unpaid loan on the death benefit?

  1. The loan is forgiven and the full face amount is paid
  2. The loan reduces the cash value but never affects the death benefit
  3. The loan balance plus accrued interest is deducted from the death benefit Correct answer.
  4. The beneficiary must repay the loan separately after the claim is paid

Explanation

A policy loan is an advance against the policy's value, and any outstanding balance plus interest is subtracted from the proceeds at death. The beneficiary receives the face amount reduced by the debt, unless the loan was repaid during the insured's life.

Question 39Life and Annuity Policies

A policyowner wants a life policy whose cash value is tied to the performance of a separate investment account and who is willing to bear the investment risk. Which policy type fits?

  1. A variable life policy Correct answer.
  2. A fixed deferred annuity
  3. A traditional whole life policy
  4. A level term policy

Explanation

Variable life insurance places the cash value in separate accounts whose value fluctuates with market performance, and the owner bears that investment risk. The death benefit may also vary, subject to a guaranteed minimum in many designs.

Question 40Life and Annuity Policies

A universal life policy is described as having an unbundled structure. What does this mean?

  1. The policy cannot be surrendered for cash value
  2. The mortality charge, expense charge, and interest credit are disclosed and charged separately Correct answer.
  3. The premium must be paid in equal amounts every year
  4. The death benefit is fixed and cannot be adjusted by the owner

Explanation

Universal life separates the cost of insurance, expense loads, and interest crediting so the owner can see each component and adjust premiums within limits. This transparency is what distinguishes it from traditional whole life, where these elements are bundled into one premium.

Question 41Life and Annuity Policies

Which statement best describes the purpose of a policy illustration provided at the time of sale?

  1. It shows hypothetical values based on stated assumptions and is not a guarantee Correct answer.
  2. It lists only the insurer's historical investment returns
  3. It guarantees the future cash values and death benefit shown
  4. It replaces the policy contract as the controlling document

Explanation

A policy illustration projects how the policy could perform under specified assumptions, such as a guaranteed and a non-guaranteed interest rate. It is a sales and disclosure tool, not a contract, and the values shown may not be realized.

Question 42Life and Annuity Policies

An applicant submits a life insurance application with a conditional receipt and is killed in an accident before the insurer issues the policy. What generally determines whether the death benefit is payable?

  1. Whether the agent had already collected the first premium
  2. Whether the insurer had ordered a medical exam
  3. Whether the beneficiary files the claim within 30 days
  4. Whether the applicant was insurable as a standard risk on the date of application Correct answer.

Explanation

A conditional receipt provides interim coverage only if the proposed insured met the insurer's underwriting requirements on the date the application and premium were submitted. If the applicant would have been insurable as a standard risk, the claim is paid even though the policy was never delivered.

Question 43Life and Annuity Policies

Which clause gives the insurer the right to cancel a policy for nonpayment of premium and specifies when coverage ends?

  1. The entire contract clause
  2. The reinstatement provision
  3. The payment of premium provision Correct answer.
  4. The nonforfeiture clause

Explanation

The payment of premium provision states when premiums are due and how long coverage continues if they are not paid, including the grace period. It is the contractual basis for lapse when premiums are not received.

Question 44Life and Annuity Policies

An insured's policy is reinstated after a lapse. Which statement describes the standard effect of reinstatement?

  1. The original contestable period starts over from the reinstatement date
  2. The policy resumes with the same face amount, and the insurer may require evidence of insurability and payment of overdue premiums Correct answer.
  3. The cash value is automatically restored to its pre-lapse level with no payment required
  4. The beneficiary designation is voided and must be re-executed

Explanation

Reinstatement restores the original policy, but the insurer typically requires proof of insurability, payment of overdue premiums with interest, and repayment of any loan. A new contestable period generally begins from the reinstatement date for statements made in the reinstatement application.

Question 45Life and Annuity Policies

Which of the following is a typical requirement for a life insurance policy to qualify as a modified endowment contract?

  1. The policy is issued with a face amount below the insurer's minimum
  2. The policy is owned by a corporation rather than an individual
  3. The policy is a term policy with no cash value
  4. The policy fails the seven-pay test because premiums are paid faster than a level seven-year schedule allows Correct answer.

Explanation

A policy becomes a modified endowment contract when it is funded more rapidly than the seven-pay test permits, meaning premiums exceed what would pay the policy up in seven level annual payments. MEC treatment changes the tax rules for loans and withdrawals, which are taxed income first.

Question 46Life and Annuity Policies

A beneficiary receives a life insurance death benefit as a lump sum. How is that payment generally taxed?

  1. The amount is taxable only to the extent it exceeds the premiums paid
  2. The amount is taxed as capital gain in the year received
  3. The death benefit is generally received free of federal income tax Correct answer.
  4. The full amount is taxable as ordinary income

Explanation

Death benefits paid to a named beneficiary are generally excluded from the beneficiary's gross income for federal income tax purposes. Any interest earned after the insurer holds the proceeds may be taxable when received.

Question 47Life and Annuity Policies

An owner of a non-qualified deferred annuity dies before annuitization, and the contract passes to a named beneficiary. What is the general tax consequence to that beneficiary?

  1. The gain is taxed as a long-term capital gain
  2. The entire gain above the owner's investment in the contract is taxable as ordinary income when received Correct answer.
  3. The beneficiary receives the full contract value free of any income tax
  4. Only the original premium is taxable to the beneficiary

Explanation

At the owner's death before annuitization, the beneficiary generally includes the excess of the contract value over the owner's investment in the contract as ordinary income. The investment in the contract is recovered tax-free, and the gain is not treated as capital gain.

Question 48Life and Annuity Policies

Which annuity feature guarantees that the annuitant's payments will continue for a minimum number of years even if the annuitant dies sooner?

  1. A straight life annuity
  2. A joint and survivor annuity
  3. A life annuity with a period certain Correct answer.
  4. A deferred income annuity

Explanation

A life annuity with a period certain guarantees payments for at least the stated number of years; if the annuitant dies before that period ends, the remaining payments go to a beneficiary. This reduces the monthly income compared with a straight life annuity because of the added guarantee.

Question 49Life and Annuity Policies

A fixed deferred annuity has a market value adjustment provision. When does the adjustment typically apply?

  1. When the owner surrenders the contract during the surrender charge period Correct answer.
  2. When the annuitant reaches the contract's maturity date
  3. When the owner dies and the beneficiary takes a lump sum
  4. When the insurer declares a higher renewal rate

Explanation

A market value adjustment applies when the owner withdraws more than the free amount during the surrender charge period, and it moves the payout up or down to reflect changes in interest rates since purchase. It is designed to protect the insurer from losses when contracts are surrendered early.

Question 50Life and Annuity Policies

A policyowner wants to add coverage that pays an additional benefit if the insured dies from an accident. Which rider is designed for this purpose?

  1. A payor benefit rider
  2. An accidental death benefit rider Correct answer.
  3. A child term rider
  4. A disability income rider

Explanation

An accidental death benefit rider pays an additional amount, often equal to the face amount, if the insured dies from a covered accident within the rider's terms. Death from other causes still pays the base policy benefit only.