Life Insurance Policies
Variable Universal Life
A combination of universal life and variable life...
Permanent Life Insurance
A general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured (or until age 100) as long as the premium is paid...
Variable Life
A level, fixed premium, investment-based product...
Cash Value
A policy's savings element or living benefit is called...
The target premium
A recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime...
no cash value
Term insurance has...
Accumulate
To build up...
When the amount of needed protection is time sensitive, or decreases over time.
When is decreasing term primarily used?
If the death occurs within a specified period of time or if the insured outlives the policy term.
When is the return of premium paid?
Term
Which type of insurance policy would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?
Lifetime (permanent) protection and accumulates cash value.
Whole life insurance provides...
The death benefit is at $0 at the end of the policy term.
Why isn't a decreasing term policy renewable?
Deferred
Withheld or postponed until a specified time or event in the future is called...
1) Be registered with FINRA; 2) Be licensed by the state to sell life insurance; and 3) Have received a securities license.
Agents selling variable life insurance products must...
Renewable Provision
Allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability...
Universal Life
Also known by the generic name of "flexible premium adjustable life"...
Straight Life
Also referred to as ordinary life or continuous premium whole life...
The premiums paid are more than the cost of the policy.
Although adjustable life policies contain most of the common features of other whole life policies, the cash value of an adjustable life policy only develops when...
The insurance company guarantees a return in premium.
An ROP policy offers the pure protection of a term policy, but what happens if the insured remains healthy and is still alive once the term limit expires?
Return of premium (ROP) life insurance
An increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid...
Assets in the general account.
Assets in the separate account cannot be commingled with...
Nonforfeiture Values
Benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses is called...
Ajustable Life: Policy Loans
Can barrow cash value...
Adjustable Life: Key Features
Can be Term or Whole Life; can convert from one to the other...
Adjustable Life: Premium
Can be increased or decreased by policyowners...
The limited-pay policies
Cash value builds up faster for...
Variable Life Insurance Products
Contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance is called...
Fixed Life Insurance Products
Contracts that offer guaranteed minimum or fixed benefits is called...
Insure the payment of a mortgage or other debts if the insured dies prematurely.
Decreasing term coverage is commonly purchased to...
Single Premium Whole Life
Designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment...
Adjustable Life
Developed in an effort to provide the policyowner with the best of both worlds (term and permanent coverage)...
Increasing Term
Features level premiums and a death benefit that increases each year over the duration of the policy term...
Securities
Financial instruments that may trade for value (for example, stocks, bonds, options) is called...
Adjustable Life: Cash Value
Fixed rate of return; general account...
The policyowner to pay more or less than the planned premium.
Flexible premium policies allow...
Universal Life: Premium
Flexible; minimum or target...
Adjustable Life: Face Amount
Flexible; set by policyowner with proof of insurability...
The insured's attained age at the time of the renewal.
If the policy is renewed at the end of the 10-year period, the premium is based on what?
The returned premiums are not taxable.
In an ROP policy since the amount returned equals the amount paid in...
Death benefit
In increasing and decreasing term policies, which policy component fluctuates during the policy term?
The premium remains level.
In indexed life, if the insurer assumes the risk...
The policy premiums increase with the increases in the face amount.
In indexed life, if the policyowner assumes the risk...
Policy Maturity
In life policies, the time when the face value is paid out is called...
Be licensed for both securities and life insurance.
In order to sell Variable Universal Life, a producer must also...
The performance of the portfolio in which the premiums have been invested by the insurer.
In variable life, the cash value of the policy is not guaranteed and fluctuates with...
Proof of insurability
Increases in the death benefit or changing to a lower premium type of policy will usually require...
To fund certain riders that provide a refund of premiums or a gradual increase in total coverage.
Increasing term is often used by insurance companies...
Those insureds who do not want to be paying premiums beyond a certain point in time.
Limited-pay policies are well suited for...
Renewable, convertible, or renewable and convertible.
Most term insurance policies are...
Straight Life
Out of the common whole life policies, which one has the lowest annual premium?
Universal Life: Key Features
Permanent insurance with renewable term protection component...
Decreasing Term
Policies feature a level premium and a death benefit that decreases each year over the duration of the policy term...
Lapse
Policy termination due to nonpayment of premium is called...
Level Term Insurance
Premium and death benefit stay the same...
Annually Renewable Term
Premium goes up each year and the death benefit stays the same...
Decreasing Term
Premium stays the same while the death benefit decreases...
Increasing Term
Premium stays the same while the death benefit increases...
Term Insurance
Premiums for whole life policies usually are higher than...
Level Premium Term
Provides a level death benefit and a level premium during the policy term...
Whole Life Insurance
Provides lifetime protection, and includes a savings elements (or cash value)...
Convertible Provision
Provides the policyowner with the right to convert the policy to permanent insurance policy without evidence of insurability...
25% to 50% more.
ROP policies are structured to consider the low risk factor of a term policy but at a significant increase in premium cost, sometimes as much as...
Temporary & Permanent Protection
Regarding the length of coverage, all life insurance policies fall into 2 categories:
Fluctuate
Rise and fall irregularly in number or amount is called...
The minimum premium and the target premium.
Since the premium can be adjusted in Universal Life, the insurance companies may give the policyowner a choice to pay either of the 2 types of premiums...
Term Insurance
Temporary protection because it only provides coverage for a specific period of time is called...
The lowest premium as compared to any other form of protection.
Term policies provide for the greatest amount of coverage for...
The minimum premium
The amount needed to keep the policy in force for the current year...
Face Amount
The amount of benefit stated in the life insurance policy is called...
Variable Life
The cash values are not guaranteed and the death benefit is not fixed...
Increasing Death Benefit option
The death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases...
Level Death Benefit option
The death benefit remains level while the cash value gradually increases, thereby lowering the pure insurance with the insurer in the later years...
Annually renewable term insurance
The insurance component of a universal policy is always...
Adjustable Life
The insured typically determines how much coverage is needed and the affordable amount of premium...
Attained Age
The insured's age at the time the policy is renewed or replaced is called...
Level Term Insurance
The most common type of temporary protection purchased is called...
Living Benefits
The policyowner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered...
Universal Life
The policyowner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again...
Straight Life
The policyowner pays the premium from the time the policy is issued until the insured's death or age 100...
Variable Life
The policyowner, rather than the insurer, decides where the net premiums (cash value) will be invested...
Level Premium
The premium for whole life policies is based on the issue age; therefore, it remains the same throughout the life of the policy...
Annually Renewable Term
The premium increases annually according to the attained age, as the probability of death increases...
Level Premium
The premium that does not change throughout the life of the policy is called...
Annually Renewable Term
The purest form of term insurance...
Single Premium Whole Life
This policy is completely paid-up after one premium and generates immediate cash...
Limited-pay Whole Life
This type of policy has a shorter premium-paying period, but higher annual premium...
Endow
To have the cash value of a whole life policy reach the contractual face amount is called...
Option A: The level death benefit option. Option B: The increasing death benefit option.
Universal life offers one of two death benefit options to the policyowner which are...
Age 65
What age do the limited-pay policies stop?
Insurance component and cash account
What are the 2 components in a universal policy?
Straight whole life, limited-pay whole life, and single premium whole life.
What are the 3 basic forms of whole life insurance?
1) Level; 2) Increasing; and 3) Decreasing
What are the 3 basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term?
Level premium, death benefit, cash value, and living benefits.
What are the key characteristics of whole life insurance?
Return Of Premium
What does ROP stand for?
Pure Death Protection
What does Term Insurance provide?
The missing premium may be deducted from the policy's cash value, the policy will not lapse.
What happens if an insured skips a premium payment on a universal life policy?
Pure Life Insurance
What is another name for term insurance?
The cash value is dependent upon the performance of the equity index.
What is the main feature of indexed whole life?
Usually 3 to 6%
What's the contract interest rate in a universal policy?
Refers to the death benefit, which does not change.
What's the meaning of "level" in level term insurance?
