Chapter 4: Life polices

Tim has a universal life policy. The cash value growth in his policy is:

Interest sensitive

Michael has a universal life policy with an increasing death benefit option. With an initial face amount of $50,000, what would the actual death benefit be?

$55,000

At what age is an insured for life insurance considered statistically dead?

100

What does renewable term guarantee?

The insureds insurability

Which type of term policy allows the policy owner to switch to permanent insurance?

Convertible term

Mortgage protection is typically covered with:

Decreasing term

A policy owner can collect the face amount on what type of policy?

Endowmnet policy

Which of these statements accurately portray a whole life policy?

Endows at age 100 and paid up at a stated time.

Paula has an insurance policy that has a guaranteed minimum cash value, a guaranteed death benefit, fixed premiums, and grows at a rate reflected by a selected fund index. Which type of life policy fits this description?

Equity indexed life

With term life insurance, which of the following types of premium remains the same for the entire policy period?

Level premium.

Which type of life insurance policy combines insurance protection with an accumulation. If cash value?

Permanent insurance

Which of the following life insurance policies will build up cash value the fastest?

Single premium

A husband and wife purchases a life insurance policy that covers both of them. The policy paid nothing when the husband died. Two years later, the wife dies and a death benefit is paid to the beneficiary. What type of policy is this?

Survivorship life policy

In which of the following ways does term life insurance and whole life insurance differ?

Term insurance does not build cash value.

Which of the following provisions may NOT be adjusted in an adjustable life policy?

The insured

What describes a level term policy?

The premium and the protection remain constant for the term of the policy.

Albert surrenders how whole life policy ten years after it was purchased. What can he expect?

To pat taxes on the cash value in excess of premium paid.

At what point does a whole life policy pay the face amount?

Upon the insureds death or reach age 100

The option to convert term life insurance to a permanent form of coverage can normally be executed:

Without proof of insurability

With renewable term insurance,

The premium increases at renewal