Chapter 4 Review Questions
Life Insurance Policy with death benefits?
Can fluctuate according to the performance of its underlying investment portfolio is variable life policy can fluctuate according to the performance of it's underlying investment portfolio.
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance Policy provides an income for a specific period starting at the death of the insured .
Survivorship Policy
Insures 2 individuals and is designed to pay a benefit upon the second death.
What is IOLI?
Investor Originated Life Insurance
Credit Life Insurance
Issued in an amount not to exceed the amount of the loan. It's designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.
David needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. Level term written to cover a need for a specified period of time at the lowest premium is called?
Level Term Insurance
Characteristics of Straight Life Policy?
Premiums are payable for as long as there is insurance coverage in force.
Face Amount Plus Cash Value Policy
Suppose to pay at the insured's death. Face amount plus the policy's cash value. Is a contract that promises to pay at the insured's death in face amount of the policy plus a sum equal to the policy's cash value.
Who benefits in Investor-Originated Life Insurance when insured dies?
The policy owner benefits upon the death of the insured.
What type of life insurance incorporates flexible premium and an adjustable death benefit?
Universal Life is designed to provide flexible premiums and an adjustable death benefits.
Modified Endowment Contract
Policy that is over funded to where it does not meet the 7 pay test.
