93. If an insured dies during the grace period, what will the beneficiary receive?
Answer: C
The beneficiary will receive the death benefit, minus the unpaid premium.
If an insured dies during the grace period, the beneficiary is entitled to the death benefit, but it will be reduced by any unpaid premiums that were due at the time of death.
A) The extended term value.
This option is incorrect because the extended term value refers to a specific type of non-forfeiture option that allows the policy to remain in force for a limited time. It does not apply to the situation of death during the grace period, where the death benefit is the relevant consideration.
B) Nothing; the annuity policy is null and void.
This option is incorrect. While it may seem that a policy could become void due to unpaid premiums, during the grace period, the policy is still in effect, and the beneficiary can receive a death benefit, albeit reduced by any outstanding premiums.
C) The death benefit, minus the unpaid premium.
This option is correct. When an insured passes away during the grace period, the insurer will pay out the death benefit to the beneficiary, deducting any unpaid premiums owed at the time of death. This ensures that the policy remains valid as long as the grace period is active.
D) The cash value of the policy.
This option is incorrect because the cash value is separate from the death benefit and is typically accessed through surrendering the policy, not applicable in the event of a death during the grace period. The beneficiary is entitled to the death benefit, not the cash value.
Conclusion
The correct answer is definitively C because it accurately reflects the insurer's obligation to pay the death benefit, with the only adjustment being for any unpaid premiums. Options A, B, and D fail to recognize the terms of the policy during the grace period, while only option C aligns with the standard practices of life insurance payouts in such scenarios.