Ch. 3 Exam 1
J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this?
Modified Premium Life
In order to sell a (n)____ Life policy, a producer is required to register with financial Industry Regulatory Authority (FINRA).
Variable
A variable insurance policy
does not guarantee a return on its investment accounts
A Universal Life Policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the
expense charges
A term life insurance policy matures:
upon the insured's death during the term of the policy
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew
without evidence of insurability
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
What type of policy would offer a 40-year old the quickest accumulation of cash value?
20-pay life
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing Term
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?
Equity Index Insurance
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face Amount plus the policy's cash value
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 life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
Which of these needs is satisfied by Adjustable Life insurance?
Insured's needs for flexible premiums
What type of policy covers two people and pays upon the death of the last insured?
Survivorship
What type of life insurance are credit policies issued as?
Term
What advantage does the renewability feature give to a term policy?
The insured may extend the coverage period
What is true about a Variable Whole Life Policy
a minimum guaranteed death benefit is provided
Variable Whole Life Insurance can be described as
both an insurance and securities product
What is not a characteristic of an Adjustable Life Policy
face amount can be adjusted using policy dividends
Credit Life Insurance is..
issued in an amount not to exceed the amount of the loan
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
A Limited Pay Life Policy has:
premium payments limited to a specified number of years
Whole Life Insurance is sometimes referred to as "Straight Life". What does the word "straight" indicate when using this phrase?
the duration of premium payments
The amount of coverage on a group credit life policy is limited to
the insured's total loan value
Under a Graded Premium Whole Life policy,
the premium increases each year during the early years of the contract and remains the same after that time
Under a Renewable Term policy,
the renewal premium is calculated on the basis of the insured's attained age
What is considered an element of a Variable life Policy
underlying equity investment
What kind of premium does a Whole Life policy have?
Level
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
Level term
S is covered by a whole life policy. Which insurance product can cover his children?
Child Term Rider
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?
Payor Provision
Which of these characteristics is consistent with a Straight Life policy?
Premiums are payable as long as there is insurance coverage in force
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Renewable
Which of the following types of permanent life insurance policies offers the highest initial cash value
Single Premium
K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?
Straight Life
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
A(n) ____ life policy offers the owner investment in products such as money-market funds, long-term bonds and equities
Variable
A(n) _____ _____ life policy combines investment choices with a form of Term Coverage
Variable Universal
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a
Variable Universal Life Policy
A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:
Variable life
