Life & Health 2

The type of policy that can be changed from one that does not accumulate cash value to one that does, is a:

Convertible Term Policy.

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is greater.

Variable Life insurance is based on what kind of premium?

Level fixed

Which of the following is an example of a limited-pay life policy? -Level Term Life -Straight Life -Life Paid-Up at age 65 -Renewable Term to age 70

Life Paid-Up at age 65

Which of the following is not one of the three basic types of coverages that are available, based on how the face amount changes during the policy term? -Renewable -Decreasing -Level -Increasing

Renewable

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

The beneficiary.

What determines the cash value of a variable life policy?

The performance of the policy portfolio.

Which policy component decreases in decreasing term insurance?

Face amount.

A Return of Premium term life policy is written as what type of term coverage?

Increasing

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

Immediate annuity.

What is another term for the accumulation period of an annuity?

Pay-In Period

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdrawals a portion of the policy's cash value. There is a limit for a withdrawal & the insurer charges a fee. What type of policy does the insured most likely have?

Universal Life

What type of policy allows withdrawals or partial surrenders?

Universal Life

All of the following are true of an annuity owner except? -The owner must be the party to receive benefits. -The owner pays the premiums on the annuity. -The owner has the right to name the beneficiary. -The owner is the party who may surrender the annuity.

The owner must be the party to receive benefits.

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard & Poor's 500 index. She would likely purchase an:

Equity Indexed Annuity.

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments & expense factors, the cash values could change from those shown in the policy at issue time. The policy is an:

Interest-sensitive whole life policy.

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable & still provide a death benefit should one of them die?

Joint Life

All of the following are true regarding the convertability option under a term life insurance policy except? -upon conversion, the premium for the permanent policy will be based upon attained age. -upon conversion, the death benefit of the permanent policy will be reduced by 50%. -Evidence of insurability is not required. -Most term policies contain a convertability option.

upon conversion, the death benefit of the permanent policy will be reduced by 50%.

The annuity owner dies while the annuity is still in the accumulation stage. What will happen?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

An insured purchased a 10-year level term life policy that is guaranteed renewable & convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

Which of the following is true regarding the annuity period? -during this period of time the annuity payments grow interest tax deferred. -it is also referred to as the accumulation period. -it is the period of time during which the annuitant makes premium payments into the annuity. -it may last for the lifetime of the annuitant.

it may last for the lifetime of the annuitant.

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

required a premium increase each renewal.

Equity index annuities -are more risky that variable annuities. -are security instruments. -invest conservatively. -seek higher returns.

seek higher returns.

What characteristic makes whole life permanent protection?

Coverage until death or age 100.

An insurance policy that only requires a payment of premium at its conception, provides insurance protection for the life of the insured, & matures at the insured's age 100 is called:

Single premium whole life.