Life Insurance Exam: Chapter 2

The type of term insurance that provides increasing death benefits as the insured ages is called

increasing term

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

Variable Whole Life insurance is based on what type of premium?

Level Fixed

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower

In a single employer group plan, what is the name of the policy issued to the employer?

Master contract

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

Which type of life insurance policy allows the policyowner to pay more or less than a planned premium?

Universal Life

An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize?

viatical settlement

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 and still provide a death benefit should one of them die?

Joint Life

The death protection component of Universal Life Insurance is always

annually renewable term

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?

It will increase because the insured will be 5 years older than when the policy was originally purchased.

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

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

The beneficiary