A Document Attached to the Policy That Modifies Its Coverage

question 19

Multiple Choice

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

• A) rider.
• B) waiver of premium.
• C) automatic premium loan.
• D) beneficiary.
• E) incontestability clause.

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Definitions:

Net Present Value

The economic distinction based on the present valuation of incoming versus outgoing cash flows during a fixed period.

Profitability Ratio

A class of financial metrics used to evaluate a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.

Average Accounting Return

A financial ratio that measures the average net income a company expects to earn from an investment compared to its initial cost.

Book Value

The net value of a company's assets as recorded on the balance sheet, calculated by subtracting liabilities from the total value of assets.