Section 1 Types of Individual Life Insurance
In a Limited Pay policy, protection extends until the insured reaches what age?
100
X has a 25 year term with his Family Income Policy. If X dies 10 years into the term, how long will his beneficiary receive monthly income?
15 years
If an insured purchased a 20 year Family Maintenance policy at age 25, and then died at 35, how long would benefits be paid to his beneficiaries
20 years
Which of the following contracts would be most likely to not be renewable
A 30-year term policy
Which policy allows the owner to change his/her coverage amount within limits set by the company?
Adjustable Life
A policy that offers a great deal of flexibility regarding changing the face amount and premium paying methods is called
Adjustable Life or Universal Life
Which of the following statements concerning Endowment policies is not true
An Endowment Policy may not be used for retirement
Which of the following combinations best describes a Universal Life Policy?
Combination of Term Insurance protection and a cash accumulation plan
Which of the following policies would be the most "interest sensitive"
Current Assumption Whole Life
X borrows $12,000 to buy a new car. What type of insurance is best suited to make sure that the debt is paid off in the event of her death?
Decreasing term
Which rider covers other family members in addition to the insured?
Family Policy Rider
Coverage under which initial premiums are less than normal for the first few years, then gradually increase over the next several years until they become level for the duration of the policy, is known as
Graded Premium Whole Life
Which of the following is not a characteristic of Whole Life
Maturity when the insured reaches age 100, with increasing premiums
Which policy is also known as Automatically Convertible Term
Modified Life
Which of the following statements is true regarding Universal Life
Mortality charges and expenses are deducted monthly
A person pledges $15,000 to his church to cover expense for a new roof. The roof will need to be replaced in approximately 10 years. What is the best way to be sure that the $15,000 will be available when needed?
Purchase a 10-year Endowment Policy
Which of the following would have the greatest cash value initially?
Single Premium Whole Life
Which type of policy can usually be converted
Term
In a third-party contract, which of the following is not considered a part of the contract?
The beneficiary
What increase in a Whole Life Policy with each successive premium payment?
The cash value
What do Endowment and Term Policies have in common?
The face amount of the contract is paid if the insured dies within a specified period
In a Straight Life Policy, what does the term "straight" apply to?
The length of time the premiums are paid
Which of the following statements describing Whole Life Insurance is incorrect
The policy's cash value decreases every year the policy is in force
Which of the following is a true statement concerning a Family Policy
The premium rate is based on the current age of the head of the household
Which of the following will always provide the highest amount of permanent insurance per dollar of premium?
Whole Life
Decreasing Term Insurance might best be used for covering
a home mortgage
Under a Universal Life Policy, interest on the cash accumulation account is credited
annually
An agent selling participating policies
can not gaurantee dividends
A Family Policy would include all of the following except
children's coverage that terminates without a conversion privilege
Another word for a noguaranteed or curret premium is
indeterminate
The cash value of a variable life policy
is determined by the investment experience of the separate accounts
The primary purpose of Term Insurance is
To provide pure insurance protection
A Life Paid Up at Age 65 policy
is paid up when the insured reaches age 65, with continuing cash value growth
The Level Premium concept works on the premise that
the insured overpays in the early years
Which of the following is not true regarding an Indeterminate Premium Policy?
there is no guaranteed maximum premium stated in the contract that the policy could ever go above
In a Family Income policy, when does the "clock" start?
At the inception of the policy
Which of the following statements is true in regard to conversion of a Term Policy?
The time limit that a person has to convert his/her policy varies from policy to policy
An insurance policy designed to pay dividends would be called
participating
A return of premium rider
pays an additional benefit equal to the premiums paid
A return of cash value rider
pays an additional death benefit equal to the cash value
The payor benefit typically waives premiums on a juvenile policy if the
person who pays the premium dies or becomes disabled before the insured child reaches a certain age
If an agent is selling a Family Policy
the agent must obtain the signature of both spouses
In an Internet Sensitive Whole LIfe Policy
the cash value accumulation is affected by the interest rates
When the insured reaches age 100, his/her Whole Life Policy is said to mature(endow) because
the cash value is equal to the policy's face amount
A 5-year renewable and convertible Term policy
will have higher premiums every 5 years
A policy written to insure two or more individuals with the face amount paid upon the death of the first is a
Joint Life
A life insurance policy covering the lives to two or more individuals designed to pay proceeds only after the last person dies is called
Joint Survivor (Joint and Last Survivor)
Which of the following policies provides the maximum amount of protection for the lowest initial outlay of funds?
Level terms
The initial premium is lower than a traditional Whole Life Policy during an introductory period, but increases to a greater amount thereafter. The premium changes only once. What type of policy does this describe
Modified Whole Life
Which of the following policies would have a reduction in the face amount in later years
Multiple protection
