Chapter 1: Types of individual Life Insurance

The policy owner of a whole life insurance policy is also the insured. what age must the insured attain in order to receive the policies face amount

Age 10

Whole life policies provide protection until the insured reaches what age

Age 100

The death protection component of a universal life policy expressed as what type of coverage

Annually renewable term

In variable universal Life insurance to what policy component does the term variable refer

Cash value and death benefit

What happens to the cash value in a whole life insurance policy matures

Cash value is paid to the policyowner

An individual has just borrow $10,000 on a 5-year note from his bank the note is due in installments what type of life insurance policy would best suited to the situation

Decreasing term

What type of life insurance is best suited to cover a mortgage

Decreasing term

If an employee wants to join group life insurance coverage outside of the open enrollment. What would the employee have to provide

Evidence of insurability

When the amount of insurance is increased in an adjustable life policy what will the insurer require for the insured

Evidence of insurability

What is the main advantage of converting from group life insurance to individual coverage

Evidence of insurability is not required

What does level refer to in level term insurance

Face amount

What policy component must decrease in decreasing term insurance

Face amount

Under a 20 pay whole life policy in order for the policy to pay the death benefit to a beneficiary the premiums must be paid for what time period

For 20 years or until the insured's death, whichever occurs first.

What type of policy issues certificates of insurance to the insureds

Group Policy

What type of policy is typically issued without proof of insurance for an insured

Group policy

What are the characteristics of the groups that under rights will consider before issuing a group life policy

Groups purpose size financial strength and turnover

Universal life policies have two types of interest rates what are they

Guaranteed and current

A whole life policy that requires that the policy owner only pays premiums for a specific number of years is known as what kind of policy

Limited pay whole life

What type of life insurance policy is life paid up at age 65

Limited pay whole life

What are living benefits of whole life insurance

Loan values

What universal life option has a gradually increasing cash value in a level death benefit

Option A

What are the death benefit options in universal life policy

Option A level death benefit and option B increasing death benefit

What is the major difference between the most common types of whole life policies straight life limited payment and single premium

Premium payment mode

Whole life insurance policies mature when the insurer reaches the age of 100 if the owner of a whole life policy dies at age 80 and there are no outstanding loans on the policy what portion of the death benefit would be paid to the beneficiary

The full death benefit

In annually renewable term policies what is the annual premium based upon

The insured's attained age

Who is entitled to the cash flows in a life insurance policy

The policy owner

What happens to the premium an annually renewable term life policy

The premium increases with each renewal

How is the premiums determined in a joint life insurance policy

The premium is based on the average age of the insureds

Intern policies what happens to the premium throughout the time of the policy

The premium remains level

If an insurer terminates membership and group life insurance to what type of insurance can the insured convert the coverage

Whole life

Group life insurance policies are written as what type of insurance

annually renewable term

Who is insured under a juvenile life policy

minor

Regarding taxation how does the cash value of a universal life policy accumulate

tax deferred

What type of life insurance policy offers pure death protection

term

An insured receives a monthly summary for his life insurance policy he notices 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 type of life insurance policy provides permanent protection

whole life

A policy states that it will pay a specific face amount 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?

20-year level term

What type of premium is charge on a straight life policy

A level premium for the life of the insured

What type of whole life insurance policies only requires a payment of premium at its inception and in addition to providing insurance protection for the life of the insured endows at the insured's age 100

Single premium whole life

What type of whole life insurance policies only requires a payment of premium at its inception and in addition to providing insurance protection for the life of the insured endows at the insureds age 100

Single premium whole life

What elements of an adjustable life policy can be changed by the policyowners

The amount and payment period of the premium, the face amount, and the period for protection

Under option B in a universal life policy what happens to the death benefit

The death benefit increases each year by the amount of the cash value increases

Who owns a group life insurance contract

The employer (also known as the sponsor of the group)

Why are price loans not available on term insurance

There is no cash value to borrow against

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

To prevent the policy from lapsing

Between adjustable life and universal life policies which one provides more flexibility to the policy owner

Universal Life

In what type of life insurance policies can the policy owner skip premium payments without the policy lapsing

Universal Life

In a joint life policy when is the death benefit paid

Upon the first death

When would a 20 pay whole life policy endow

When the insured reaches age 100

When does an adjustable life policy accumulate cash value

When the premiums paid are more than the cost of the policy