Chapter 3 Test 1

Additional coverage can be added to a Whole Life policy by adding a(n)

Decreasing term rider

Credit life insurance is typically with which of the following types of coverage?

Decreasing term

Whole life insurance policies are contractually guaranteed to provide of the following, EXCEPT

partial withdrawal features beyond a surrender charge period

What type of life insurance are credit policies issued as

term

The investment gains from a Universal Life Policy usually go toward:

the cash value

The amount of coverage on a group credit life policy is limited to:

the insured's total loan value

How does a typical variable life policy investment account grow

through mutual funds, stocks, bonds

What type of life insurance incorporates flexible premiums and an adjustable death benefit

universal life

When is the face amount paid under a Joint Life and Survivor policy

upon death of the last insured

What type of life policy covers 2 lives and pays the face amount after the first one dies?

joint life policy

A father who dies within 3 yr after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provision

T would like to be assured $10,000 is available in 10 yrs to replace a roof on his house. What kind of $10,000 policy should T purchase?

Ten-Year Endownment

What type of insurance offers permanent life coverage with premiums that are payable of life?

Whole Life

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole life

K pays on a $20,000 20-Year Endowment policy for 10 yrs and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000 death benefit

What type of policy would offer a 40 year old the quickest accumulation of cash value?

20-pay Life

Which of these is an element of a Variable Life Policy

A fixed, level premium

Which of the following types of policies pays a benefit if the insured goes blind?

An Accidental Death & Dismemberment (AD&D)

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it

Decreasing Term

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

Equity index insurance

Term insurance has which of the following characteristics?

Expires at the end of the policy period

what does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?

Face amount plus the policy's cash value

what does a face amount plus cash value policy supposed to pay at the insured's death?

Face amount plus the policy's cash value

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30yrs

Family maintenance policy

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed

Level term

When a life insurance policy exceeds certain IRS table values, the result would create which of the following?

Modified Endowment Contract (MEC)

Which of these life products is not considered interest-sensitive?

Modified Whole Life

What type of life policy covers two people and pays upon the death of the last insured?

Survivorship

All of these are characteristics of an Adjustable Life policy, EXCEPT

face amount can be adjusted using policy dividens

Variable Life products require a producer to

hold a Life insurance license and a Securities license

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy

increase face amount

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Variable life

which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling

Variable life

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

A Limited-Pay Life policy has

premium payments limited to a specified number of years

Who benefits in investor-originated life insurance (IOLI) when the insured dies?

policyowner