Life Insurance Chapter Quiz Questions
Which type of life insurance policy generates immediate cash value? A. single premium B. level term C. decreasing term D. continuous premium
A. single premium
The death protection component of universal life insurance is always A. adjustable life B. increasing term C. annually renewable term D. whole life
C. annually renewable term
The term "fixed" in a fixed annuity refers to all of the following EXCEPT A. amount and length of payments B. death benefit C. guaranteed rate of interest D. equal annuity payments
B. death benefit
Who bears all the investment risk in a fixed annuity? A. the annuitant B. the insurance company C. the owner D. the beneficiary
B. the insurance company
An insured has a variable life policy with a $100,000 face amount. At one time, the cash value exceeded $100,000 and was worth $150,000. During this time, the policy face amount was increased to $150,000. In the following year, the cash value took a significant decline and was worth only $70,000. What was the policy's face amount adjusted to? A. 70,000 B. 80,000 C. 100,000 D. 150,000
C. 100,000- cannot be lower than the guaranteed minimum of 100,000
Which of the following types of policies alloss the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount? A. flexible life B. variable life C. adjustable life D. universal life
D. universal life
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy? A. half the amount B. lower C. higher D. as high
B. lower
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this? A. term to specified age B. ordinary life policy C. limited pay whole life D. level term
D. level term
Which of the following is NOT true regarding the annuitant? A. the annuitant must be a natural person B. the annuitant cannot be the same person as the annuity owner C. the annuitant's life expectancy is taken into consideration for the annuity D. the annuitant receives the annuity benefits
B. the annuitant cannot be the same person as the annuity owner
A life insurance policyowner skips her premium payment, but the policy does not lapse. Instead, the premium amount is deducted from the cash value of the policy. What type of policy is this? A. variable life B. adjustable life C. whole life D. universal life
D. universal life
A straight life policy has what type of premium? A. a decreasing annual premium for the life of the insured B. a variable annual premium for the life of the insured C. a level annual premium for the life of the insured D. an increasing annual premium for the life of the insured
C. a level annual premium for the life of the insured
Variable life insurance is based on what kind of premium? A. graded B. level fixed C. increasing D. decreasing
B. level fixed
Which component increases in the increasing term insurance? A. cash value B. interest on the proceeds C. premium D death benefit
D death benefit
What are the two components of a universal life policy? A. insurance and investments B. mortality cost and interest C. separate account and policy loans D. insurance and cash account
D. insurance and cash account
Which of the following statements is correct regarding a whole life policy? A. the policy premium is based on the attained age? B. the death benefit may increase or decrease during the policy period C. the policyowner is entitled to policy loans D. cash values are not guaranteed
C. the policyowner is entitled to policy loans