3 - Life Insurance Policies - Provisions, Options and Riders Part A (15 questions)

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

A 15-year mortgage is best protected by what kind of life policy?

15-year decreasing term

Which of these types of insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable life

Which policy requires a producer to register with the National Association of Securities Dealers (NASD) before selling?

Variable life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of term coverage on himself under the same policy. What kind of policy should Q purchase?

Whole life policy with other insured rider

Who benefits in Investor-Originated Life-Insurance when the insured dies?

Policyowner

What type of life insurance gives the greatest amount of coverage for a limited period of time?

Term life

The investment gains from a universal life policy usually go toward

The cash value

When is the face amount of a whole life policy paid?

When the insured dies or at the policy's maturity date, whichever happens first

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid up at retirement. Which of these should and purchase?

30 Pay Life

How long does the coverage normally remain on a limited-pay life policy?

Age 100

Which statement about a whole life policy is correct?

Cash value may be borrowed against

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family maintenance policy

What kind of special need would a policyowner require with an Adjustable Life iInsurance policy?

Flexible premiums

What kind of life insurance product covers children under their parent's policy?

Term rider

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole Life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?

Whole life policy with other insured rider

When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?

Conversion provision

All of these are characteristics of an Adjustable Life policy EXCEPT

Face amount can be adjusted using policy dividends

Which type of policy is considered to be overfunded, I stated by the IRS guidelines?

Modified endowment contract

What kind of life insurance starts out as temporary coverage but can be later modified to come to coverage without evidence of insurability?

Convertible term

Term insurance has which of the following characteristics?

Expires at the end of the policy period

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while death benefit remains the same. What kind of policy is this?

Modified whole life

T would like to be assured $10,000 is available in 10 years to replace the roof on his house what kind of $10,000 policy should T purchase?

Ten-Year Endowment

A potential client, age 40, would like to purchase a whole life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-Pay Life accumulates cash value faster than Straight Life

What kind of premium does a whole life policy have?

Adjustable

All of these statements about Equity Indexed Life insurance are correct EXCEPT

The premiums can be lowered or raised, based on investment performance

A life insurance policy that provides a policyowner with cash value along with a level face amount is called

Whole life