Life and Health Test 1
John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal the face amount of the policy when he reaches the age of:
100
Which of the following is an example of a Limited-Pay Life policy:
20-Pay Life
Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-amortized $50,000 business-improvement loan. Which of the following plans would adequately protect Ms. Timms at the minimum premium outlay?
A $50,000 Decreasing Term policy for 20 years
A 45-year old customer who is seeking to supplement his retirement income at age 65 would NOT buy a:
Immediate Annuity
Which of the following is an example of a Limited-Pay Life policy?
Life Paid-Up at Age 65
Which of the following statements is true about the premium payment schedule for a Whole Life policy?
Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death
In order to sell variable life insurance you must be registered with which of the following?
The NASD
Which of the following is NOT correct regarding Ordinary Whole Life policies?
The cash value grows more quickly in the beginning years of the policy
The cash value grows more quickly in the beginning years of the policy
The liquidation of principal and interest Favorable tax treatment
If a person wants to invest a lump sum in an annuity that may appreciate along with market and economic conditions, they should buy a:
Variable Annuity
A life insurance policy whose cash value will fluctuate depending upon the performance of a separate account is:
Variable Life
If a client wants cash value life insurance with a flexible premium and an adjustable death benefit that will allow the policy owner a choice of various cash value investment options, he should buy:
Variable/Universal Life
At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains that he can pay for the policy in several ways. One method is called 20-Pay Life, and another, Straight Life. Tom wishes to know which plan will accumulate cash value at a faster rate in the early years of the policy. Which of the following would be the producer's most appropriate response?
"20-Pay Life will accumulate cash value faster."
A business owner with a fluctuating income who wants a life insurance policy that can be changed to suit economic conditions should buy:
Adjustable Life
You have a client that is a real estate agent. Which of the following types of permanent protection is best for this type of client?
Adjustable life
Which of the following contracts requires that a series of benefit payments be made at specified intervals?
Annuity
Which of the following individual policy conversions is usually permitted without any evidence of insurability?
Conversion from a Term policy to a Whole Life policy
Most Term Life insurance:
Is convertible to permanent Whole Life without a physical exam
Which of the following statements about a Renewable Term policy is true?
It is renewable at the option of the insured
A life insurance policy that covers two parties, but only pays when the last party dies is known as:
Survivorship Life
Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?
Term
An insurance producer selling a Variable Annuity whose cash value depends on the performance of an underlying investment account must be registered with:
The Financial Industry Regulatory Authority (FINRA, formerly the NASD)
A life insurance policy that combines term insurance protection, a flexible premium, and cash value accumulation is:
Universal Life
Which of the following policies provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation?
Whole Life
