Insurance agent chapter 3
What type of premium is charged on a straight life policy?
A level premium for the life of the insured
A whole life policy that requires that the policyowner only pays the premiums for a specified number of years is known as what type of policy?
A limited pay whole life
Whole life insurance policies provide protection until what age?
Age 100
Group life insurance policies are written as what type of insurance?
Annually renewable Term
The death protection component of a universal life policy is expressed as what type of coverage?
Annually renewable term
Invariable life insurance, to what policy component does the term variable refer?
Cash value and death benefit
What happens to the cash value when a whole life insurance policy matures?
Cash value is paid to the policyowner
If an employee wants to join group life insurance coverage outside of the open enrollment period, 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 from the insured?
Evidence of insurability
Who is insured under a juvenile life policy?
Juvenile life insurance is, as the name implies, any life insurance written on the life of a minor.
What universal life option has a gradually increasing cash value and a level death benefit?
Option A
Regarding taxation, how does the cash value of a universal life policy accumulate?
Tax deffered
Who is entitled to the cash values in a life insurance policy?
The policyowner
What happens to the premium in a annually renewable life insurance policy?
The premium increases with each renewal
How is the premium determined in a joint life insurance policy?
The premium is based on the average age of the insured.
In term policy what happens to the premium during the policy?
The premium remains level
Why are policy loans not available on term insurance?
There is no cash value to borrow against
What is the purpose of establishing a premium for a universal life policy?
To prevent the policy from lapsing Group
The death protection component of a universal life policy is expressed as what type of coverage?
An annually renewable term
An indiviual just borrowed 10,000 on a 5 year note from his bank. The note is due in installments. What type of insurance policy is best suited for this sisuation?
Decreasing Term
What type of life insurance is best suited to cover a mortgage?
Decreasing Term
What is the main advantage from converting from a group life insurance to a induvial life insurance?
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
What policy must decrease in decreasing insurance?
Face amount
What type of policy is typically issued without proof of the insurability from the insured?
Group Policy
What type of policy issues certificates to the insureds?
Group policy
What are the characteristics of the group that underwriters consider before issuing a group life policy?
Group purpose size, financial strength, and turnover
How is a premium determined in a joint life policy?
It is determined by the attained age of the insured.
What type of life insurance policy is paid up to the age of 65?
Limited Pay Whole Life
What are the living benefits of whole life insurance?
Loan values
What are the death benefit options in universal life policies?
Option A- level death benefit Option B - increasing death benefit
What are the main differences between the most common types of life policis? Straight Life, Limited Payment, and Single Premium
Premium payment mode
What type of life insurance policy offers pure death protection?
Term
What elements of udjustable life insurance can be changed by the policyowner?
The amount and payment period of life insurance, 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 with the amount of cash value increases.
Who owns a group life insurance contract?
The employer (also known as the sponsor of the group)
In annually renewable term policies, what is the annual premium based on?
The insured attained age
In a joint life policy, when is the death benefit paid?
Upon the first death
An insured receives a monthly summary for 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
When does a adjustable life insurance policy accumulates cash value?
When the premiums paid are more than the cost of the policy.
If the insured terminates membership in a group life insurance , to what type of insurance can the insured convert the coverage?
Whole life
What type of life insurance policy provides whole protection?
Whole life
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 20 years or under the insured's death, which ever occurs first
Universal life policies has two different types of ...
general and current
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 policy generates immediate cash value?
single premium whole life
Between adjustable life and universal life policies, which one provides more flexibility to the policyowner?
universal life
What type of life insurance policy can the policyowner skip premium payments without the policy lapsing?
universal life
