Life Policies
Group credit life insurance is typically a form of
Decreasing term insurance
What would be considered an advantage of purchasing term life insurance?
The initial premium is lower compared to the same amount of whole life coverage
An individual who purchases a modified life insurance policy expects
an improvement in future income
Which statement regarding a single premium life insurance policy is NOT correct?
Additional premiums may be required under certain conditions
Which is an accurate description of the premium in a graded premium life insurance policy?
Annual increases in premium for a stated number of years then levels off for the remainder of the contract
Which statement regarding the cash value of a whole life insurance policy is correct?
Available to the policyowner when policy has been surrendered
Which statement regarding universal life insurance is correct?
Cash value accumulations have a guaranteed minimum interest rate
Which statement concerning a decreasing term life policy is accurate?
Face amount decreases over the policy period
Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?
Federal Premium Taxes
All of these are considered features of whole life insurance EXCEPT
Initial premium is lower than for an equivalent amount of term insurance
Which of these statements accurately portrays an adjustable life insurance policy?
Policy can alternate between forms of term and whole life insurance
All of these statements concerning universal life insurance are false EXCEPT
Policy indicates how much of the premium is used toward company expenses
How are level term policies able to provide level premiums?
Premiums are averaged over the term of the policy
Which of the following would NOT be a reason for purchasing life insurance on a child's life?
Provide benefits for the child if the parents die
When would evidence of insurability be required for a person already covered with a variable universal life policy?
The death benefit is increased
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes?
The gain is treated as taxable income and a penalty tax is imposed on the gain
An advantage of owning a flexible premium life insurance policy would be
The policyowner can make policy changes without difficulty
Which of these is NOT a reason to buy a term life policy?
To accumulate savings
Which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
An insurance policy that can also be classified as a securities product is called
Variable Life
What kind of life insurance policy allows a policyowner the choice of investments along with flexible premium payments?
Variable universal life
When can a life insurance policy be issued WITHOUT the insured's consent?
When a parent purchases a policy on the life of a minor child
At what point are death proceeds paid in a joint life insurance policy?
When the first insured dies
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
