1.Review scenario 111: In a producer training scenario, complete this life-insurance rule: ___ terminates the policy and pays the available ___ value. Which option belongs in the blank?
Cash surrender terminates the policy and pays the available cash surrender value.
Example: A client or producer applies this rule in a policy situation. The correct concept is Cash surrender. Cash surrender terminates the policy and pays the available cash surrender value.
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2.Review scenario 112: While comparing life-insurance rules, complete this life-insurance rule: ___ uses cash value as a single premium for a lower face amount of ___ permanent coverage. Which option belongs in the blank?
Reduced paid-up uses cash value as a single premium for a lower face amount of paid-up permanent coverage.
Example: A client or producer applies this rule in a policy situation. The correct concept is Reduced paid-up. Reduced paid-up uses cash value as a single premium for a lower face amount of paid-up permanent coverage.
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3.Review scenario 113: During an exam review, complete this life-insurance rule: ___ generally preserves the original face amount for a limited term using the cash value. Which option belongs in the blank?
Extended term generally preserves the original face amount for a limited term using the cash value.
Example: A client or producer applies this rule in a policy situation. The correct concept is Extended term. Extended term generally preserves the original face amount for a limited term using the cash value.
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4.For review, determine when applying a policy concept, complete this life-insurance rule: The ___ dividend option pays the declared dividend directly to the owner. Which option belongs in the blank.
The cash dividend option pays the declared dividend directly to the owner.
Example: A client or producer applies this rule in a policy situation. The correct concept is Cash. The cash dividend option pays the declared dividend directly to the owner.
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5.Review scenario 115: In a licensing-exam fact pattern, complete this life-insurance rule: The ___-reduction option uses dividends to ___ the amount the owner must pay. Which option belongs in the blank?
The premium-reduction option uses dividends to reduce the amount the owner must pay.
Example: A client or producer applies this rule in a policy situation. The correct concept is Reduce premium. The premium-reduction option uses dividends to reduce the amount the owner must pay.
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Paid-up additions use dividends to purchase small amounts of additional paid-up whole life insurance.
Example: A client or producer applies this rule in a policy situation. The correct concept is Paid-up additions. Paid-up additions use dividends to purchase small amounts of additional paid-up whole life insurance.
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7.For review, identify settlement option pays policy proceeds in equal installments for a selected number of years.
Fixed-period settlement pays proceeds over a selected time period.
Example: A client or producer applies this rule in a policy situation. The correct concept is Fixed period. Fixed-period settlement pays proceeds over a selected time period.
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8.For review, identify settlement option pays a selected dollar amount periodically until principal and interest are exhausted.
Fixed-amount settlement pays a chosen amount at regular intervals until funds are exhausted.
Example: A client or producer applies this rule in a policy situation. The correct concept is Fixed amount. Fixed-amount settlement pays a chosen amount at regular intervals until funds are exhausted.
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9.For review, identify settlement option can provide payments for as long as the beneficiary lives.
Life-income settlement uses mortality assumptions to provide income for the beneficiary's lifetime.
Example: A client or producer applies this rule in a policy situation. The correct concept is Life income. Life-income settlement uses mortality assumptions to provide income for the beneficiary's lifetime.
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10.Review scenario 120: Under an interest-only settlement option, the insurer generally:
Interest-only settlement leaves principal with the insurer while periodic interest is paid as specified.
Example: A client or producer applies this rule in a policy situation. The correct concept is Holds the principal and pays interest. Interest-only settlement leaves principal with the insurer while periodic interest is paid as specified.
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