Life Insurance Policies 15Q

Randall purchased a 20-year family maintenance policy when he was 30 years old. He died at age 40. How many years will benefits be paid to his beneficiaries?

20 years

Timothy has a plan that provides coverage for life, but the premiums are not due beyond age 65. It has guaranteed premium, accumulates cash value and the coverage will never decrease. Timothy has purchased:

A limited-pay life plan

A universal life plan differs from a whole life plan in all of the following ways EXCEPT:

A whole life plan displays a detailed list of all mortality, expense and interest payments in the premium calculation.

Continuous premium, limited premium and single premium are types of whole life policies. Which of the following is indicative of a continuous premium method?

It has the lowest annual premium

__________ is a life insurance policy that offers the same guarantees as traditional whole life insurance with a lower initial premium that remains level for the first five years of the policy.

Modified life

Combinations plans are intended to be representative of the needs of the insured. One such plan is called the ___________________________. It combines ordinary life and level term insurance. It provides monthly income for a stated period of 10, 15, or 20 years, or to an age - as selected by the insured.

Family maintenance policy

Angelina purchased a policy with a face value of $100,000. She died 10 years later and the policy paid a death benefit of $50,000. Why?

Her policy was a decreasing term.

Term life insurance policies are used to provide temporary insurance protection - usually for a specific amount of time. If an insured provides evidence of insurability at the end of a term and qualifies for reduced premiums rates, the insured has a(n) -

Reentry term policy

Charles and Rick have started an electronics business. Their business is young and their cash flow is tight. What is the primary advantage of them purchasing a modified premium whole life policy?

They are able to purchase a larger policy than traditional whole life.

There are several types of whole life policies. Which of the following types of whole life policy offers flexible premium payments tied to interest rate fluctuations?

Current assumption whole life

As Samantha considers her options to purchase life insurance, she looks at the advantages of a graded premium life policy. Which of the following is not an advantage of such a policy?

In the beginning a greater amount of the premium is applied to the death benefit - less to the cash value.

Helen and Mark have purchased a policy to cover both of their lives. They know that there are benefits and also disadvantages of such a policy. Which of the following is not something that would be regarded as a benefit of a joint policy?

Premiums and face value cannot be changed.

An agent wants to qualify to sell variable life plans. He must:

Secure a license from FINRA, as well as the state

Valerie is looking at types of insurance to enhance her retirement. Which of the following should she NOT consider in planning her retirement?

Term insurance

One of the most common types of life insurance is the whole life insurance policy. Which of the following is a typical characteristic of a whole life policy?

-The premiums remain level for the entire period that the policy is in force. -Whole life policies have a guaranteed cash value. -The face amount of the policy does not change while the policy is in force.

Samantha wants to purchase life insurance, but her funds are limited at this time. Her agent has recommended a whole life policy that starts out with a premium that is lower than usual. The premium increases every year for a specified number of years. This type of policy is called a -

Graded premium life policy

A variable life plan must be a type of universal life because -

The accumulation accounts must be separated from general company assets.

Matthew has recently purchased a variable life insurance policy. In reading his prospectus, he sees that the various accounts have the same managers as some of the mutual funds he owns. Matthew should understand which of the following:

The insurance company maintains separate accounts for each investment and they are not co-mingled with other assets.

Universal life policies are similar to whole life in that they ___________________.

both provide death protection and cash value

The cash value in a whole life policy is held in the insurance company's:

General account

All of the following are true concerning Interest Sensitive Whole Life (ISWL) EXCEPT:

The policyholder will always know the amount of cash value available.

Credit life insurance is a type of decreasing term insurance. It was designed to protect creditors in the event that the debtor dies. All of the following are true statements about credit life EXCEPT:

The number of insureds on the policy can range from 1-50.

erm coverage has many applications, such as mortgage protection. It gives the insured the best 'bang for their buck'. It is not without its disadvantages however. Which of the following is not a disadvantage of term insurance?

-It is pure death protection. -It is generally not renewable after age 65 or 70. -It becomes more expensive over time.

Group life insurance has similar characteristics and also characteristics that are different from individual life policies. Which of the following is not a similarity that the two types of policies share?

Both can deduct premium payments

Arnold has purchased an Adjustable Life plan. His agent has told him that he may do all of the following EXCEPT:

Quit paying premiums after 7 years when they vanish.