Types of Life Insurance Policies Practice Quiz

A Universal Life Insurance policy is best described as a/an Annually Renewable Term policy with a cash value account Variable life with a cash value account Whole life policy with 2 premiums: target and minimum Flexible Premium Variable Life policy

Annually Renewable Term policy with a cash value account

When an annuity is written, whose life expectancy is taken into account?

Annuitant

Which of the following products will protect an individual from outliving their money? Adjustable Life policy Permanent Life insurance Annuity Joint and Survivor policy

Annuity

The PO of an adjustable life policy wants to increase the death benefit. The death benefit... Can be increased only when the policy has developed a cash value Can be increased only by exchainging the existing policy for a new one Can be increased by providing evidence of insurability Cannot be increased

Can be increased by providing evidence of insurability

Another name for interest-sensitive whole life insurance

Current assumption life A whole life policy that provides a guaranteed death benefit to age 100

What does "level" refer to in level term insurance? Cash value Interest rate Face amount Premium

Face amount

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase because the insured will be 5 years older

When would a 20-pay whole life policy endow?

When the insured reaches 100 A limited-pay whole life policy, just like straight life, endows for the face amount if the insured lives to age 100. The premium, however, is paid off in 20 years

A policy will pay the death benefit if the insured dies 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 policy is written to provide a level death benefit for 20 years

An individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?

Payments for 15 years With any period certain, death of the annuitant within the stated period will provide payments to the beneficiary only for the remainder of the period certain

A domestic insurer issuing variable contracts must establish one or more... Liability accounts Annuity Accounts General accounts Separate accounts

Separate accounts

Which of the following policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

Which type of life insurance generates immediate cash value? Continuous premium Single premium Level term Decreasing term

Single Premium

Which policy is a traditional level premium contract? Universal Life Variable Universal Life Straight Life Adjustable Life

Straight Life

Which of the following types of annuities will generally provide the highest monthly income? Installment refund Life with a 10-year period certain Straight life Joint and survivor

Straight life

Which of the following is called a "second-to-die" policy? Survivorship life Family income Juvenile life Joint life

Survivorship life

Which of the following would help prevent a universal life policy from lapsing? Face amount Adjustable premium Corridor of insurance Target premium

Target premium Recommended amount that should be paid on a policy in order to cover the cost of insurance protection and keep the policy in force throughout its lifetime

The PO 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