Ch.3A Exam - Life Insurance Policies: Provisions, Options and Riders
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 the death benefit remains the same. What kind of policy is this?
Modified whole life
What kind of policy is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan?
Variable Universal Life
Y purchased a $100,000 worth of permanent protection on himself and $50,00 worth of 10-year Term coverage for his wife on the same policy. What kind of policy did Y purchase?
Whole Life policy with an Other Insured Rider
Equity Indexed Life Insurance
-cash value has a minimum rate of accumulation -tied to an equity index such as the S&P500 -if the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
10 years
What type of policy pays a benefits if the insured goes blind?
AD&D
What features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurabilty?
Conversion privilege
J is insured 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
Whole Life
Provides the policyowner with cash value along with a level face amount
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
What type of permanent life insurance policies offer the highest initial cash value?
Single Premium
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 cash value in a ____ Life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors.
Universal
S, age 40, is looking to buy a Life Insurance policy that will allow for increases or decreases in coverage as his needs change. What policy is best suited for him?
Universal life
how long does coverage normally remain on a limited pay life policy?
age 100
a company that owns a life insurance policy on one of its key employees may do all of the following:
borrow against cash value, change the beneficiary, cancel the policy
the combination of whole life and ______ term insurance is referred to as a family income policy
decreasing
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
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider
which combination plan is designed to protect an insured from an unpaid mortgage balance upon premature death?
joint life
What kind of premium does a Whole Life policy have?
level
what type of life insurance are credit policies issued as?
term
The amount of coverage on a group credit life policy is limited to
the insured 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 life insurance policies combine term insurance with an investment element?
universal life
what type of life insurance policy combines term insurance with an investment element?
universal life
Life insurance immediately creates an estate upon the death of an insured. Which policy is characterized by a guaranteed minimum death benefit?
variable life
What would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
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
Under an Interest Sensitive Whole Life policy,
cash values are determined by interest rates
a _______ life policy combines investment choices with a form of term coverage
variable universal
Life products considered interest-sensitive?
variable universal life, interest sensitive whole life, variable life
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew
without evidence of insurability