Chapter 2 Quiz

The time period during which an annuitant contributes to an annuity is called

The accumulation period

Which type of life insurance policy generates immediate cash value?

Single premium

An annually renewable term policy

Renews each year with an increased premium

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

100

Whose life expectancy is taken into consideration in an annuity?

Annuitant

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need?

Decreasing term

An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need?

Deferred

Which of the following would be considered a disadvantage of term insurance?

If the insured dies after the end of the term, there is no death benefit to the beneficiary

Which of the following is an example of a limited-pay life policy?

Life paid-up at age 65

Which of the following is true regarding a joint life policy?

Premium is based on the average age of the insureds

With a traditional whole life policy, the death benefit

Remains constant over time

Which of the following statements is true regarding a universal life policy?

The premiums can be decreased by the insured

An insured receives a monthly summary of his life insurance policy. The cash value this month is significantly lower than it was last month. What type of policy is it?

Variable

The renewable provision allows the policyowner to renew the coverage at the expiration date

Without evidence of insurability