Life Insurance Policies- Provisions, Options, & Riders

A policy that owns a life insurance policy on one of its key employees may do all of the following EXCEPT?

change the policy's interest rate

Additional coverage can be added to a Whole Life policy by adding a(n)

decreasing term rider

Which of these 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

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the

expense charges

Which of these life products is NOT considered interest-sensitive?

modified whole life

A Limited-Pay Life policy has

premium payments limited to a specified number of years

Which of the following actions is NOT possible with a Universal Life Policy?

premiums may be applied as credit against income taxes

Under a Graded Premium Whole Life policy

the premium increases each year during the early years of the contract and remains the same after that

Under a Graded Premium policy

the premiums are lower during the policy's early years

How does a typical Variable Life Policy investment account grow?

through mutual funds, stocks, bonds

Which of the following is considered an element of a Variable Life Policy?

underlying equity investment

The cash value in a(n) _________ Life policy may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?

universal

A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as?

variable life

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family Maintenance Policy

Life insurance that covers an insured's whole life with level premiums paid over a limited is called?

Limited Pay Life

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?

20-pay life accumulates faster than straight life

What kind of life starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?

Convertibles term

P owns a $25,000 Life Policy that pays the face amount to him if he live to age 70, or to his beneficiary if he dies before age 70. What kind of Policy does P own?

Endowment at age 70

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

What type of policy covers two people and pays upon the death of the last insured?

Survivorship

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?

Ten- Year Endowment

K purchased a Life insurance in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much higher premium is paid because of falling interest rates. This type of policy is known as a(n) Life Policy

Universal

Which of the following Life insurance policies combine term insurance with an investment element?

Universal Life

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the?

expense charges