Which of the Following Statements About the Waiver-Of-Premium Provision in Life

question 9

Multiple Choice

Which of the following statements about the waiver-of-premium provision in life insurance is true?

• A)Because the probability of becoming disabled exceeds the probability of premature death,the cost to include this provision is usually prohibitive at younger ages.
• B)Premiums are usually waived if the insured becomes partially disabled.
• C)Life insurance protection continues in force during a period of disability,but dividends cease and cash values are reduced.
• D)The disability must occur before a stated age,such as 65,for premiums to be waived.

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Definitions:

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or disposal, representing what a company can expect to receive.

Replacement Cost

The current cost of replacing an asset with a new one of similar kind and quality.

LIFO

Last-In, First-Out, an inventory valuation method where the most recently produced or acquired items are the first to be expensed.

Inventory Liquidations

The process of converting a company's inventory into cash, typically at a discount, often used to meet short-term financial needs.