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:

Dividend Payout

Dividend Payout refers to the portion of a company's earnings distributed to shareholders as dividends, representing a return on investment.

Dividend Yield

A financial measurement that illustrates the annual amount a company dispenses in dividends compared to its current stock price.

P/E Ratio

The ratio of a company's share price to its earnings per share, indicating the value the market places on its earnings.

Earnings Retention Ratio

The proportion of net earnings not paid out as dividends but retained by the company to be reinvested in its core business, or to pay debt.