Wendy Has Had a Life Insurance Policy for Five Years

question 12

Multiple Choice

Wendy has had a life insurance policy for five years with her spouse listed as the person who receives the benefit if she dies. She was recently divorced. Which of the following provisions should she take action on?

• A) Incontestability clause
• B) Misstatement of age provision
• C) Naming a beneficiary
• D) Policy reinstatement
• E) The grace period

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Definitions:

Dividends

Funds distributed by a corporation to its shareholders, often as a portion of the company's profits.

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.

Net Book Value

The value of an asset after deducting accumulated depreciation, amortization, and impairment from its original cost.

Investment Account

A financial account held at a financial institution that holds securities, cash, and other assets for investment purposes.