Fund Life & Health Insurance

Decide whether each question is true or false.

1. One major disadvantage of life insurance is that products can be complex and difficult to compare.

2. The three factor contribution formula consists with three sources including gains from investment earning, gains from mortality and gains from underwriting.

3. Under the reinstatement clause, policyholder has the right to reinstate a lapsed policy under certain conditions.

4. According to the contribution principle, divisible surplus should be distributed to policies in the same proportions as the policies are considered to have contributed to the surplus.

5. The delay clause grants the company the right to defer cash surrender value payments, withdrawals, and the making of policy loans for up to six months after their request. But this

provision does not apply to the payment of death claims.

6. If the insured purchase a life insurance policy and later committed a suicide, the benefit is not payable according to suicide clause.

7. Policies that provide a non-level death benefit is commonly used as mortgage protection term policies.

8. Because the annuity income pays the insured rather than the beneficiary, there is no need for a beneficiary in the annuity contract.

9. The key difference between a contributory plan and a noncontributory plan is that the employer make contributions toward the contributory plans premium whereas for the noncontributory plan, only the employee makes payments towards the plan costs.

10. Reentry option is better than the convertibility option for the insureds who can demonstrate that they meet continuing insurability criteria.