Exam 1

N is a 40-year old applicant who would like to retire at age 70. He is looking to BUY A LIFE INSURANCE POLICY WITH LEVEL PREMIUMs, PERMANENT PROTECTION, and be PAID-UP at RETIREMENT. Which of these should N purchase?

30 Pay Life

Which provision allows the policyowner to CHANGE a term life policy to a PERMANENT ONE WITHOUT PROVIDING PROOF OF GOOD HEALTH?

Conversion

The UNIVERSAL LIFE POLICY is called an UNBUNDLED LIFE POLICY because the policyholder can see the EXPENSE CHARGES, the INTEREST EARNED, and the

Cost of insurance

CREDIT LIFE INSURANCE is typically issued with which of the following types of coverage?

Decreasing Term

TERM INSURANCE has which of the following characteristics?

Expires at the end of the policy period.

What kind of insurance policy supplies an INCOME STREAM over a set period of time that started when INSURED DIES?

Family Maintenance Policy

Which of the following combination plans is designed to PROTECT an INSURED from an UNPAID MORTGAGE BALANCE UPON PREMATURE DEATH?

Joint Life (covers 2 or more people)

What kind of PREMIUM does a WHOLE LIFE POLICY have?

Level

Which of these would be considered a LIMITED PAY LIFE policy?

Life paid-up at age 70

Which is true concerning a VARIABLE UNIVERSAL LIFE POLICY?

Policyowner controls where the investment will go and selects the amount of the premium payment.

Which statement is correct regarding the PREMIUM PAYMENT SCHEDULE for WHOLE LIFE POLICIES?

Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured.

What type of life policy covers TWO PEOPLE and PAYS UPON the DEATH of the LAST INSURED?

Survivorship

What type of life insurance are CREDIT POLICY ISSUED as?

Term

What kind of life insurance product COVERS CHILDREN UNDER their PARENT'S policy?

Term Rider (Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider)

How does a typical VARIABLE LIFE POLICY INVESTMENT account GROW?

Through mutual funs, stocks, and bonds.

A 42-year old executive wants to purchase life insurance that will allow for INCREASE or DECREASE COVERAGE as his/her NEEDS CHANGE. Which policy meets this need.

Universal Life (characterized by flexible premiums and an adjustable death benefit)

A(n) ______ Life policy offers the OWNER INVESTMENT in products such as MONEY-MARKET funds, LONG-TERM BONDS and EQUITES.

Variable

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

What type of insurance offers PERMANENT LIFE COVERAGE with PREMIUMS that are PAYABLE for LIFE?

Whole life

Q would like to purchase $100,000 of PERMANENT PROTECTION on his WIFE and $50,000 of TERM COVERAGE ON HIMSELF under the same policy. What kind of policy should Q purchase?

Whole life policy with other insured rider.