Life Insurance chp 3
What type of policy would offer a 40-year old the quickest accumulation of cash value?
*20-pay life (the shorter the pay period, the faster the cash value growth.)
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
*30 Pay Life (Limited pay whole life policies have level premiums that are limited to a certain period.)
Whose life is covered on a life insurance policy that contains a payor benefit clause?
*Child (A payor benefit clause is generally added to a life policy that insures the life of a juvenile. It provides continuance of insurance coverage in the event of the death or total disability of the individual responsible for the payment of premiums.)
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 (The conversion privilege allows an individual to leave the group term plan and continue his or her insurance without providing evidence of insurability.)
A term life insurance policy matures
*upon the insured's death during the term of the policy (Term life policies can only mature (pay out the face amount) if death occurs during the term of the policy.)
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit
J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
*20-Pay Life. (the shorter the pay period, the faster the cash value growth.)
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
Which statement regarding the Misstatement of Age provision is considered to be true?
Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered
A Family Income Policy is a combination of Whole Life and
Decreasing Term insurance
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
What statements about accumulated interest earned on dividends from an insurance policy is TRUE?
It is taxed as ordinary income
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances?
L's spouse dies at age 66.
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called
Limited Pay Life
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
Policyowner
Which is true concerning a Variable Universal Life policy?
Policyowner controls where the investment will go and selects the amount of the premium payment
Which of these characteristics is consistent with a Straight Life policy?
Premiums are payable for as long as there is insurance coverage in force
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is
The cost
How does a typical Variable Life Policy investment account grow?
Through mutual funds, stocks, bonds
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable Life
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
level
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing term