Types of Policies chapter 2 Quiz
What kind of policy allow withdrawals or partial surrenders?
Universal life
When an annuity is written, whose life expectancy is taken into account?
Annuitant
A man decided to purchase a $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.
The policyowner 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 the insurance
What are the two components of a universal policy?
Insurance and cash account
The main difference between immediate and deferred annuities is?
when the income payments begin
A straight life policy has what type of premium?
A level annual premium for the life of the insured
Which of the following would help prevent a universal life policy from lapsing
Target premium
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
The purpose of establishing the target premium for a universal life policy?
to keep it in force
The insured is also the policy-owner of a whole life policy. What age must the insured attain in order to receive the policy's face amount
100
An individual purchased a 100,000 joint life policy on himself and his wife. Eight years later he died in an automobile accident. How much will his wife receive?
100,000
An insured purchased a variable life insurance policy with a face amount of 50,000. Over the life of the policy, stock performance declined and the cash value fell to 10,000. If the insured dies how much will be paid out
50,000
The LEAST expensive first year premium is found in which of the following policies?
Annually Renewable Term
A universal life insurance policy is best described as a?
Annually renewable term policy with a cash value account.
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated
Annuity certain
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible term policy\
What is another name for interest sensitive whole life insurance?
Current Assumption life
Which is NOT fundable for any reason?
Death benefits
An Individual just borrowed 10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be suited to this situation?
Decreasing Term
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount.
An agent selling variable annuities must be registered with
FINRA
What does "level" refer to in level term insurance?
Face Amount
What type of premium do both Universal Life and Variable Universal Life policies have?
Flexible
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
Which of the following is TRUE regarding the accumulation period of an annuity
It is a period during which the payments into the annuity grow tax deferred.
Which is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time. In response to its growing cash value
Which of the following 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
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay life
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; payment will cease.
For variable products, underlying assets must be kept in
Separate account
What type of life insurance policy generates immediate cash value?
Single Premium
Which of the following policies would be classified as a traditional level premium contract?
Straight Life
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.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
Which of the following statements is correct regarding a whole life policy?
The policyowner is entitled to policy loans
Which of the following is true regarding the premium in term policies
The premium is level for the term of the policy
What kind of policy allows withdrawals or partial surrenders?
Universal life
Which of the following types of policies allow the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
All of the following are true regarding the convertibility option under a term life insurance policy except
Upon conversion, the death benefit of the permanent policy will be reduced by 50%
In a survivorship life policy when does the insurer pay the death benefit?
Upon the last death
During partial withdrawal from a universal life policy, which portion will be taxed?
interest
The premium of s survivorship life policy compared with that of a joint life policy would be
lower
A domestic insurer issuing variable contracts must establish one or more
Separate accounts
Which of the following products will protect an individual from outliving their money?
annuity
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 age at the time of renewal
Under a 20 year pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for?
For 20 years or until death, whichever occurs first
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a
Joint like annuity
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. What policy is that?
Joint Life Policy
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases
Which of the following types of annuities will generally provide the highest monthly income?
Straight life
If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?
The full death benefit
An insurance policy that only requires a payment of premium as it's inception provides insurance protection for the life of the insured and matures at the insured age 100 is?
Single premium whole life
Which of the following is NOT one of the three times of term coverages based on what happens to the face amount during the policy term?
Renewable
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal Life
Which of the following products requires a security license
Variable annuity
Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?
Variable universal life
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
Pure life
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 man renew the policy for another 10 years but at a higher premium weight
Which of the following is called a "second-to-die' policy?
Survivorship Life
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
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
Variable whole life insurance is based on what type of premium?
Level fixed