Chapter Exam 1-Life Policies

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What life insurance policies most likely contain a 'renewability feature'?

10 Year convertible Term

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

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

15-year decreasing term

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

N is a 40-year old applicant who would like to retire at age 7-. HE is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?

30 Pay Life

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

A term rider

Which of the following types of policies pays a benefit if the insured goes blind?

AD&D

Credit life insurance is typically issued with which of the following types of coverage?

Decreasing Term

Which of these statements describe a Modified Endowment Contract (MEC)?

Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

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

Family Maintenance Policy

Someone who wants to purchase life insurance that pays a set monthly amount over a certain period of time to beneficiaries

Family Maintenance policy

Who has the option to renew a renewable term policy?

Insured

Which of these needs is satisfied by Adjustable Life insurance?

Insured's need for flexible premiums

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Level

Which of these would be considered a Limited-Pay Life policy?

Life Paid-Up at Age 70

Universal Life Insurance

Life insurance payment whose premium cost changes with the environment

Which of the following information is NOT required to be included in a Whole Life policy?

Policy's guaranteed dividend table

Concern with Variable Universal Life policy?

Policy-owner controls where the investment will go and selects the amount of the premium payment

Which of these characteristics is consistent with a straight life policy?

Premiums are payable for 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 highest initial cash value?

Single Premium

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

Ten-Year endowment

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

Term Life

What type of life insurance are credit policies issued as?

Term policies

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

Universal Life

Which of the following Life insurance policies combine term insurance with an investment element?

Universal Life

When is the face amount of a Whole Life policy paid?

Upon death or blah blah blah

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Variable Life

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

Variable Life

A(n) __________ __________ Life policy combines investment choices with a form of Term coverage

Variable Universal

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Variable Universal Life

A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)

Variable Universal life policy

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

Variable life

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

Whole life

Under a Graded Premium policy, the premiums

are lower during the policy's early years

Additional coverage can be added to a whole life policy by adding a(n)

cash value may be borrowed against

Additional coverage can be added to a Whole Life policy by adding a(n):

decreasing term rider

Credit Life Insurance

is issued in any amount at the discretion of the applicant

Who benefits in investor-originated life insurance (IOLI) when the insured dies?

policy-owner

A Limited-Pay Life policy has

premium payments limited to a specified number of years

Straight Life insurance policies:

provide most protection per dollar of annual premium

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:

the cost

Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n)

third-party with no insurable interest

When is the face amount paid under a joint life and survivor policy?

upon death of the last insured

A term life insurance policy matures:

upon the insured's death during the term of the policy

Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period

varies according to the contract


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