CA LAH Ch 4
Term life insurance is a form of insurance that is typically less expensive initially than whole life insurance and provides pure or temporary protection for a limited period of time. Which of the following statements is NOT TRUE?
The cash value endows at age 100.
Which of the following items, if any are considered level in a Variable Life policy?
Premium
Which of the following items, if any, are considered level in a variable life policy?
Premium
The ability to continue a term insurance contract without having to provide evidence of insurability best describes what option?
Renewability
A whole life policy has a level death benefit and premium. It also builds cash value. Another name for whole life is:
Straight
A combination policy that provides a large death benefit be paid upon the death of the last insured, and is typically utilized to pay estate taxes is called:
Survivorship life
A combination policy that provides a large death benefit to be paid upon the death of the last insured, and is typically utilized to pay estate taxes is called:
Survivorship life
Joe enters Sara's insurance office and makes the following statement: "I want to purchase a standard whole life insurance policy." Sara's initial reaction or thought would probably be:
"There is no such thing as a standard life insurance policy."
Paul owns a $500,000 whole life insurance contract. He takes a $10,000 loan against the cash value. His premium is $6,000, which he pays annually on September 10th. He is tragically killed on September 12th while on his way to the post office to mail his overdue premium. The loan also has an accumulated interest amount of $500. How much benefit, if any, will be paid to his beneficiary?
$483,500
Which limited pay whole life contract would have the highest annual premium?
10 pay
A Single Pay Whole life contract provides coverage until death or age ___? 90 95 100 Until the cash value is exhausted
100
A single pay whole life contract provides coverage until death or age ___.
100
Which policy/product below, sold to a 40 year old man, will mature or endow the soonest? 10 Pay Life 20 Pay Life Ordinary Whole Life 20 Year Endowment
20 Year Endowment
Which policy/product below, sold to a 65-year-old man, will mature or endow the soonest?
20-year endowment
Which limited pay Whole Life contract below would have the lowest annual premium? 10 Pay 20 Pay 30 Pay 25 Pay
30 Pay
All the statements below are TRUE of survivorship life insurance EXCEPT:
A Survivorship life policy pays a death benefit upon the death of the first insured
Joe is a real estate salesman whose income dramatically fluctuates from year to year. Which Whole Life policy below would you probably recommend, due to his fluctuating income?
Adjustable Whole Life
Joe is a building contractor whose income dramatically fluctuates from year to year. Because of his fluctuating income, which whole life policy below would you probably recommend to him?
Adjustable whole life
A variable life policy can be characterized by investing cash values in stocks, bonds, or other investment-like vehicles. Which statement below is NOT TRUE regarding this kind of life insurance product?
Agents only need a life insurance license to sell this product.
Which of the following is not a characteristic of term insurance?
Cash value builds after 3 years
Each year the owner of a Universal Life policy would receive all except: Interest earnings Policy expenses Upcoming premium Change of Beneficiary form.
Change of Beneficiary form.
Each of the following is provided to the policyowner of a universal life policy on an annual basis except:
Change of beneficiary form.
Each is a true statement regarding Juvenile Insurance except:
Death benefit increase means premium increase.
Cameron borrows $275,000 to buy a small beachfront vacation home. He wants to make sure that should he die, a death benefit is available to payoff the loan so that his wife can continue to use the vacation home. He has little additional cash for insurance, and wants the most economical policy available to cover his new debt. What type of life insurance policy would you recommend?
Decreasing Term
Michael borrows $164,000 to buy the sports car of his dreams. He wants to make sure that if he should die, he has a death benefit to pay off the loan so that his wife can enjoy the car. Short on cash, he wants the "most economical" policy available on the market. Which type of life insurance product would you recommend?
Decreasing term
Permanent whole life protection with decreasing term insurance would be found in which policy below?
Family Income
A life insurance plan that combines permanent whole life protection with decreasing term insurance best describes:
Family income
Which statement below is NOT TRUE with regard to policy loans?
If unpaid at time of death, only the loan amount is subtracted from the death benefit.
Which of the following is not a characteristic of Whole Life? Level lifetime premium Level Lifetime death benefit Cash Value = Face Amount At Age 100 Is not considered a property
Is not considered a property
Advantages of term life insurance would include all of the following except:
It always provides permanent protection to age 100
Which of the following statements regarding Universal Life insurance is NOT correct? Partial Cash Value withdrawals are allowed. The owner receives an annual statement listing the premiums paid, death benefit amount and related contract expenses. It is a combination of Annually Renewable Term and a Cash Value Fund. It has a level premium with a cash value that fluctuates depending upon stock and bond market performance.
It has a level premium with a cash value that fluctuates depending upon stock and bond market performance.
Which of the following statements regarding universal life insurance is NOT CORRECT?
It has a level premium with a cash value that fluctuates depending upon stock and bond market performance.
An endowment contract is designed to pay a benefit either at the end of a specified time frame or death, whichever occurs first. Which statement below is TRUE with regard to endowments?
Its primary focus is on an accelerated cash value.
Which statement below is true with regard to Endowments? Its primary focus is on an accelerated cash value. Endowments are designed to pay for nursing home costs. Premiums are flexible and may be skipped entirely. There is no guaranteed cash value accumulation
Its primary focus is on an accelerated cash value.
A level term policy has all of the following characteristics except:
Loan Option
Which policy below would have the lowest first year premiums? Whole Life Universal Life Single Pay Life Modified Whole Life
Modified Whole Life
Which of the following life insurance policies would have the lowest first-year premiums?
Modified whole life
A whole life or continuous premium whole life insurance policy includes a loan provision. Which of the following statements in INCORRECT?
Only fixed interest rates can be charged against the loan.
Which of the following statements in incorrect regarding Whole Life policy loans? Loans do not need to be repaid. At death, outstanding loans plus interest are subtracted from the death benefit. Only fixed interest rates can be charged against the loan. Loans may be delayed by the insurer for up to 6 months.
Only fixed interest rates can be charged against the loan.
Ricky d., age 42, wishes to convert his level term policy to a whole life policy. He has owned the term policy for 4 years. His agent informs him that the insurance company could use age 38 to determine his future whole life premiums. What term best describes this convertibility provision?
Original age
Larry, age 52 wishes to convert his level term policy to a whole life policy. He has owned the term policy for 10 years. His agent informs him that the insurance company could use age 42 to determine the future whole life premiums. What term describes this convertibility option?
Original age.
Term life insurance is a form of insurance that is typically less expensive initially than whole life insurance and provides pure or temporary protection for a limited period of time. Which of the following statements is not true?
The cash value endows at age 100.
All are incorrect regarding Variable Life insurance except:
The cash value is not guaranteed.
Which of the following statements is TRUE regarding variable life insurance?
The cash value is not guaranteed.
Which statement below is not correct with regard to Credit Life insurance?
The insured is also the beneficiary.
When discussing Life or Health insurance policies, it is important to remember that:
There is no such thing as a standard Life or Health insurance contract.
When discussing life or health insurance policies, it is important to remember that:
There is no such thing as a standard life or health insurance contract
Why would someone normally purchase credit life insurance?
To provide a death benefit to pay off a loan
Which life insurance policy below is a combination of death benefit protection, cash value buildup and the opportunity for premium flexibility?
Universal life
Cash value growth potential based upon stock and bond performance would help describe which of the following policies?
Variable life
Which life insurance policy listed below has the greatest cash value growth potential?
Variable life
A joint life policy pays a death benefit:
When either insured dies
The death benefit of a Joint Life policy pays:
When either insured dies.
