Life Insurance Policies & Annuities TEST

What policy provides lifetime protection for an insured with premiums payable for 20 years?

20 pay life

When does cash value normally start accruing in whole life policies?

3 years

What does A.R.T. stand for and what does it mean?

Annually Renewable Term Insurance *premium will increase each year

What type of policy can be changed from one that does not accumulate cash value to one that does?

Convertible Term Policy

An individual received a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. What type of annuity would best meet his need?

Deferred

What is an annuity that guarantees a minimum rate of return called?

Fixed

Which Universal Life option has a gradually increasing cash value and a level death benefit? Option A, B or C?

Option A

An insured receives a monthly summary of his life insurance policy. The cash value this month is significantly lower than it was last month. What type of policy is it?

Variable

Which annuity is the exact monthly amount not known in advance?

Variable Annuity

Does a Fixed annuity, Variable annuity, or an Equity Indexed annuity require a securities license?

Variable annuity

Whose life expectancy is taken into consideration in an annuity?

annuitant

With a traditional whole life policy, the death benefit does what?

remains constant over time

What is a component of a limited-pay whole life policy?

20 pay life OR Life paid-up at age 65

What is the equity in an equity index annuity linked to?

An index like Standards & Poor's 500

What component must increase in the increasing term insurance?

Death Benefit

Upon the death of an insured, the beneficiary of a whole life policy will receive what?

Death Benefit ONLY

An annually renewable term policy does what?

Renews each year with an increased premium

Is a term life insurance policy written for a specified period of time?

Yes

The pay-in time is known as what kind of "period?"

accumulation period

The time period during which an annuitant contributes to an annuity is called what?

accumulation period

The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount?

age 100

Why do people commonly purchase an annuity?

protect against the risk of outliving their income

When are benefits paid from a Joint Life policy?

when the 1st insured dies

When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. What policy is best suitable for that need?

Decreasing Term

Which type of life insurance policy generates immediate cash value?

Single Premium