Life and Health Test 1

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John Livingston owns a 30-Pay Life policy that he purchased at the age of 30. The cash value will equal the face amount of the policy when he reaches the age of:

100

Which of the following is an example of a Limited-Pay Life policy:

20-Pay Life

Sandra Timms, age 27, is advised by her producer to purchase Life insurance to cover a 20-year-amortized $50,000 business-improvement loan. Which of the following plans would adequately protect Ms. Timms at the minimum premium outlay?

A $50,000 Decreasing Term policy for 20 years

A 45-year old customer who is seeking to supplement his retirement income at age 65 would NOT buy a:

Immediate Annuity

Which of the following is an example of a Limited-Pay Life policy?

Life Paid-Up at Age 65

Which of the following statements is true about the premium payment schedule for a Whole Life policy?

Premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death

In order to sell variable life insurance you must be registered with which of the following?

The NASD

Which of the following is NOT correct regarding Ordinary Whole Life policies?

The cash value grows more quickly in the beginning years of the policy

The cash value grows more quickly in the beginning years of the policy

The liquidation of principal and interest Favorable tax treatment

If a person wants to invest a lump sum in an annuity that may appreciate along with market and economic conditions, they should buy a:

Variable Annuity

A life insurance policy whose cash value will fluctuate depending upon the performance of a separate account is:

Variable Life

If a client wants cash value life insurance with a flexible premium and an adjustable death benefit that will allow the policy owner a choice of various cash value investment options, he should buy:

Variable/Universal Life

At age 30, Tom Morris wishes to purchase a Whole Life policy. His producer explains that he can pay for the policy in several ways. One method is called 20-Pay Life, and another, Straight Life. Tom wishes to know which plan will accumulate cash value at a faster rate in the early years of the policy. Which of the following would be the producer's most appropriate response?

"20-Pay Life will accumulate cash value faster."

A business owner with a fluctuating income who wants a life insurance policy that can be changed to suit economic conditions should buy:

Adjustable Life

You have a client that is a real estate agent. Which of the following types of permanent protection is best for this type of client?

Adjustable life

Which of the following contracts requires that a series of benefit payments be made at specified intervals?

Annuity

Which of the following individual policy conversions is usually permitted without any evidence of insurability?

Conversion from a Term policy to a Whole Life policy

Most Term Life insurance:

Is convertible to permanent Whole Life without a physical exam

Which of the following statements about a Renewable Term policy is true?

It is renewable at the option of the insured

A life insurance policy that covers two parties, but only pays when the last party dies is known as:

Survivorship Life

Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?

Term

An insurance producer selling a Variable Annuity whose cash value depends on the performance of an underlying investment account must be registered with:

The Financial Industry Regulatory Authority (FINRA, formerly the NASD)

A life insurance policy that combines term insurance protection, a flexible premium, and cash value accumulation is:

Universal Life

Which of the following policies provides the greatest amount of protection for an insured's premium dollar as well as some cash accumulation?

Whole Life


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