life insurance 2
When does an adjustable life policy accumulate cash value?
When the premiums paid are more than the cost of the policy
Under a 20 pay whole life policy, in order for the benefit to a beneficiary, the premiums must be paid for what time period
For 20 years or until the insurer's death whichever occurs first
What is the difference between single premium and a flexible payment options in a deferred annuity
The number of payments that purchase the annuity
All of the following are true of annuity owner except
The owner must be the party to receive benefits
All of the following are true regarding a decreasing term policy Except?
The payable premium amount steadily declines throughout the duration of the contract.
Who is entitled to the cash values in a life insurance policy?
The policyowner
What happens to the premium in an annually renewable term life policy
The premium increases with each renewal
How is the premium determined in a joint life insurance policy
The premium is biased on the average age of the insureds
Why are policy loans not available on term insurance?
There is no cash value
What is the main reason for purchasing an annuity
To provide income that the annuitant
Under option B in a universal life policy what happens to the death benefit
Under option B the death benefit increases each year by the amount of the cash value increases
Under option b in an universal life policy what happens to the death benefit
Under option B the death benefit increases each year by the amount of the cash value increases
In what type of life insurance policies can the policyowner skip premium without the policy lapsing
Universal life
In a joint life policy, when is the death benefit paid
Upon the first death
What type of annuity requires an agent to have a securities license
Variable annuity
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What type of life insurance policy provides permanent protection?
Whole life
What type of life insurance provides permanent protection
Whole life
What type of insurance would perform the function of cash accumulation
Whole life insurance
If the annuitant dies before the annuitization period starts, what will the beneficiary receive?
Either the amount paid into the annuity or the cash value, whichever is greater
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value whichever is greater
What type of annuity credits it's interest based upon an index such as S&P 500?
Equity indexed annuity
What does term level refer to in level term insurance
Face amount
What policy component must decrease in decreasing term insurance?
Face amount
An annuity purchased with multiple payments that begins income payments after one year from the moment of purchase is known as what type of annuity?
Flexible premium deferred annuity
A policy states that it will pay a specified face amount if the insured dies during the 20 year premium paying period and nothing if death occurs after 20 year period. What type of policy is this
20-year level term
What type of premium is charged on a straight life policy?
A level premium for the life of the insured
What type of license is/are required to sell variable annuities
A life insurance license and a securities license
What type of license is required to sel variable annuities?
A life insurance license, securities license
What are two best phases of an annuity
Accumulation and annuitization (or pay-in and pay-out)
An individual has just borrowed $10,000 on a 5 year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation
Decreasing term
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
Joint life annuity
What is an equity-indexed annuity consider to be a fixed annuity
has a guaranteed minimum interest rate
Who bears the investment risk in a fixed annuity?
insurer
Which is a following example of a limited-pay life policy
life paid up to age 65
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures, at the insured's age 100 is called?
single premium whole life
Whole life policies provide protection until the insured reaches what age?
Age 100
In flexible premium annuities, the term flexible refers to what?
Amount of premium
In flexible premium payments annuities, the term flexible refers to what?
Amount of premium
Which of the following products provides income for a specific period of years or for life, and protects a person against a person against outliving his or her money
An annuity
The death protection component of a universal life policy is expressed as what type of coverage?
Annually renewable term
Who receives income payments from an annuity?
Annuitant
Whose life expectancy is taken into consideration in an annuity contract
Annuitant
Whose life expectancy is taken into consideration in an annuity contract?
Annuitant
If there is no named beneficiary for the annuity benefits to which entity will the benefits be paid
Annuitants estates
In an annuity, the accumulated money is converted into a stream of income during which phase?
Annuitization period
An individual has a contract that will provide him with a certain amount for the rest of his life. However, this is not a life insurance policy. What type of contract does this person have
Annuity
If the annuitant dies during the accumulation period who will receive the annuity benefits
Beneficiary
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
Beneficiary
In variable universal 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
An individual just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation
Decreasing term
What type of life insurance is best suited to cover a mortgage
Decreasing term
How long will a life annuity with a 15-year period certain pay?
For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments with last for 15 years
A man purchased a 90,000 annuity with a single premium, and began receiving payments for 2 months after that. What type of annuity is it?
Immediate
What are the two classifications of annuities according to the time when annuity payments begin?
Immediate and deferred
What type of annuity can be purchased with a single premium
Immediate annuity
What type of annuity can be purchased with a single premium?
Immediate annuity
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest earned on the withdrawn cash value
Which of the following is true regarding the annuity period?
It may last a lifetime for the annuitant
Mortality tables are used by insurance companies to predict what
Life expectancy and the death rates for specific groups of individuals
Mortality tables are used by insurance companies to predict what?
Life expectancy and the death rates for specific groups of individuals
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?
Life income with period certain
What annuity statement option provides income payments to the annuitant for the duration of his or her life; and also guarantees payment for a specified number of years
Life income with period certain
A whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy
Limited pay whole life
What type of the life insurance policy is life paid at age 65
Limited whole life
A whole life policy that requires the policyowner only pays premium for a specified number of years is known as what kind of policy?
Limited-pay whole life
How soon can income payments begin in an immediate annuity
No later than 1 year from the time of the annuity
With a single premium deferred annuity, when will the annuity payments become available?
No sooner than 1 year after the annuity purchase
Can a business or a corporation be an annuitant?
No, an annuitant must always be a natural person
What universal life option has a gradually increasing cash value and a level death benefit
Option A
What universal life option has a gradually increasing cash value and a level death benefit?
Option A
What are the death benefit options in a universal life policies
Option A level death benefit and option B increasing death benefit
What type of life insurance offers an applicant a cash value element
Permanent insurance (usually whole life)
What type of life insurance offers an applicant a cash value element
Permanent insurance (usually, whole life)
to sell variable life insurance policies, an agent must receive all of the following EXCEPT?
SEC registration
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 age 100?
Single premium whole life
What type of whole life insurance policy generates immediate cash value?
Single premium whole life
What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?
Straight life
What type of life insurance policy offers pure death protection
Term
What elements of an adjustable life policy can be changed by the policyowners?
The amount and payment period of the premium, the face amount, and the period for protection
What element of an adjustable life policy can be changed by the policyowner
The amount and payment period of the premium, the face amount, and the period protection
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statement is true?
The annuitant must be a natural person
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitants death
All of the following are true about equity indexed annuities are correct EXCEPT
The annuity receives a fixed amount of return
Whole life insurance policies mature when the insured reaches age 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?
The full death benefit
Which are true regarding equity index annuities
The insurance company keeps a percentage of the returns The have a guaranteed minimum interest rate They are less risky than a variable annuity
In annual renewable term policy, what is the annual premium upon,
The insurer's attained age
In annually renewable term policies, what is the annual premium based upon?
The insurer's attained age
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
adjust to the insurers age at time of renewal