Primerica Chapter 2 Questions

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

What does "level" refer to in Level Term Insurance?

Face amount

Both Universal Life & Variable Life have a...

Flexible premium

If an agent wishes to sell variable life policies, what license must the agent obtain?

Securities

The equity in an Equity Index Annuity is linked to...

An index like Standard and Poor's 500

Annually renewable term policies provide a level death benefit for a premium that...

Increases annually

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

What kind of policy allows withdraws or partial surrenders?

Universal Life

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase..

Equity Indexed Annuity

The death benefit under the Universal Life Option B...

Gradually increases each year by the amount that the cash value increases

What is an example of a limited pay life policy?

Life Paid-Up at Age 65

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited Pay Whole Life

A man decided to purchase $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy...

Required a premium increase each renewal

Equity Indexed Annuities

Seek higher returns

What type of policy will provide permanent protection?

Whole Life

What license or licenses are required to sell variable annuities?

Both a life insurance license and a securities license

An individual has borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

An individual has just borrowed $10,000 for his bank on a 5 year installment loan requiring payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

All the factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

Who bears all the investment risk in a fixed annuity?

The insurance company

An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?

The insured may renew the policy for another 10 years, but at a higher premium rate

What type of life insurance policy allows the policy owner to pay more or less than the planned premium?

Universal life

In the surviorship life policy, when does the insurer pay the death benefits?

Upon the last death

The main difference between immediate and deferred annuities is...

When the income payments begin

An insurance policy that only requires a payment of premium at it's inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called...

Single premium whole life

What is the purpose of establishing the target premium for the universal life policy?

To keep the policy in force

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be...

Adjusted to the insured's age at the time of the renewal

All factors being equal, the least expensive first year premium payment is found in...

Annually Renewable Term

A Return of Premium term life policy is written as what type of coverage?

Increasing

During the partial withdraw from a Universal Life Policy, which portion will be taxed?

Interest

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate

A policy will pay the death benefit if the insured died during the 20-year premium paying period, and nothing if death occurs after the 20 year-period. What type of policy is this?

Level term

The policy owner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as...

The policy contains sufficient cash value to cover the cost of insurance

A universal life insurance policy is best described as

An Annually Renewable Term policy with a cash value account

The death protection component of Universal Life insurance is always...

Annually Renewable Term

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

Beneficiary

What characteristic makes whole life permanent protection?

Coverage until death or age 100

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force