Chapter Exam - Life Policies (LAH_Texas)
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 life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?
Convertible Term
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:
Limited Pay Life
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment Contract
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
If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase
A Whole Life Policy with an Other Insured Rider
Which statement is TRUE regarding a Variable Whole Life policy?
A minimum guaranteed Death benefit is provided
Which of the following types of policies pays a benefit if the insured goes blind?
AD&D (Accidental Death & Dismemberment)
Which statement about a whole life policy is correct?
Cash value may be borrowed against
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
Decreasing Term
A Family Income Policy is a combination of Whole Life and
Decreasing Term Insurance
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
A variable insurance policy:
Does not guarantee a return on its investment accounts
K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies?
Endowment at Age 65
Which of the 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
Term insurance has which of the following characteristics?
Expires at the end of the policy period
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
Variable Life products required a producer to
Hold a Life Insurance license and a Securities license
Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?
Increase face amount
Credit Life Insurance is
Issued in an amount not to exceed the amount of the loan
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances?
L's spouse dies at age 66
Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT:
Partial withdrawal features beyond a surrender charge period
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
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
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 type of life insurance are credit policies issued as?
Term
What kind of life insurance product covers children under their parent's policy?
Term rider
The most important factor to consider when determine whether to convert term insurance at the insured attained age or the insured's original age is
The cost
The amount of coverage on a group credit life policy is limited to
The insured's total loan value
Under a Renewable Term policy,
The renewal premium is calculated on the basis of the insured's attained age
A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
Universal Life
Which of the following types of policies BEST identities one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?
Universal life
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
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
Whole Life
What type of insurance offers permanent life coverage with premiums that are payable for life?
Whole Life
A policy that becomes a Modified Endowment Contract (MEC):
Will lose many of its tax advantages
Which of these life products is NOT considered interest-sensitive?
Modified Whole Life
How long does the coverage normally remain on a limited-pay life policy?
age 100
