Insurance chapter 3

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

A(n) life policy combines investment choices with a form of term coverage

Variable Universal

A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)

Variable universal life policy

A Limited-Pay Life policy has

premium payments limited to a specified number of years

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

renewable

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

"Level". A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.

Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability ?

Conversion privilege

P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

Endowment at age 70

What does a Face Amount Plus Cash Value Policy pay upon the insured's death ?

Face amount plus the policy's cash value

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family Maintenance Policy

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

Joint Life Policy

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:

Limited-Pay Life

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

Modified Whole Life

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

Ten-year endowment

What type of life insurance gives the greatest amount of coverage for a limited period of time?

Term life

When is the face amount of a Whole Life policy paid?

The face amount of a Whole Life policy will be paid when the insured dies or on maturity of the policy, whichever occurs first.