life policies exam
All of these are valid options for an Adjustable Life Policy EXCEPT
a nonforfeiture option can be used to increase the death benefit
How are survivorship life insurance policies helpful in estate planning?
provide funds to help pay taxes
The type of multiple protection coverage that pays on the death of the last person is called a(n)
survivorship life policy
The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is
the shorter the payment period, the higher the premium
A Renewable Term Life insurance policy can be renewed
at a predetermined date or age, regardless of the insured's health
Which of the following are the premium payments for a Universal life policy NOT used for?
separate account investments
What types of life insurance are normally used for key employee indemnification?
term, whole, and universal life insurance
A Modified Endowment Contract (MEC) is best described as
a life insurance contract which accumulates cash values higher than the IRS will allow
Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive
endowment policy
A spouse and child can be added to the primary insured's coverage as what kind of rider?
family term
Which of these riders will pay a death benefit if the insured's spouse dies?
family term insurance rider
All of these are characteristics of a universal like insurance policy EXCEPT
fixed surrender value
A business will typically use which type of life insurance to cover their employees?
group policy
The premium for a Modified whole life policy is
lower than the typical whole life policy during the first few years and then higher than typical for the remainder
Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive?
nothing
A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called
universal life
Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Which type of life insurance policy is this?
universal life
A securities license is required for a life insurance producer to sell
variable life insurance
Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)?
death benefit
Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?
decreasing term insurance
Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be
$500,000
What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?
Last Survivor Life insurance
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?
Universal Life policy
A single premium cash value policy can be described as
a policy that is paid up after only one payment
Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider?
can be converted to permanent coverage without evidence of insurability
Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?
child term rider
What happens to the coverage under a children's term rider when that child reaches a certain specified age?
coverage is eliminated
When a decreasing term policy is purchased, it contains a decreasing death benefit and
level premiums
A limited payment whole life policy provides
lifetime protection
A life insurance policy that has premiums fully paid up within a stated time period is called
limited payment insurance
An interest-sensitive life insurance policy owner may be able to withdraw the policy's cash value interest free. The provision that allows this is called
partial surrendor
Under a Modified Endowment Contract (MEC), what are the likely tax consequences?
pre-death distributions will become taxable
What is the automatic continuance of insurance referred to as?
renewal
What does the word "level" in Level Term describe?
the face amount
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?
the face amount and premium will remain constant over the 10-year period
Which type of policy combines the flexibility of a universal life policy with investment choices?
variable universal life policy
What type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?
variable universal policy
A life insurance policy which contains cash values that vary according to its investment performance of stocks is called
variable whole life
All of these statements concerning whole life insurance are false EXCEPT
when a whole life policy is surrendered, income taxes may be owed
Which of these would be the best example of a limited pay life insurance policy?
whole life policy with premiums paid up after 20 years
A Renewable Term Life insurance policy allows the policy owner the right to renew the policy
without producing proof of insurability
