Types of Life Policies QUIZ

What type of whole life policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in later years, the premiums are higher than those of a straight life whole policy?

Modified Life

What are features of Indexed Universal Life?

Adjustable death benefit, cash value is dependent on the performance of the equity index, flexible premiums.

Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years. After the period of increase, the premiums will?

Become level.

Both Universal Life and Variable Universal Life have a?

Flexible Premium

Credit Life Insurance...

Insures the life of a debtor.

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

Level Term

What determines the cash value of a variable life policy?

Performance of the portfolio in which the premiums have been invested by the insurer.

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

Securities License.

An employer offers group life insurance to its employees for the amount of 10k, which of the following in true.

The cost of coverage is a deductible expense by the employer, unless the cost of coverage exceeds 50k, which it is then taxed to the employees.

An insured receives a monthly summary for their life insurance policy. They notice that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Variable

What are some characteristics of Annually Renewable Term Insurance?

It is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. Between Increasing, Decreasing, and Level insurance, It is the least expensive during the first year.

What are some true statements about Straight Life Policies?

They have the lowest premium in regards to other Whole Life Policies, the face value of the policy is paid to the insured at age 100, and it usually develops cash value by the end of the third policy year.