life prep #3

In a 7 year vesting schedule, what percentage of employer contributions must be vested after 7 years of service?

100%

The policy which will guarantee protection until age 100 and develop cash value at the fastest rate for a 30 year old male:

20-pay life

In an AD&D policy, the term '' capital sum'' refers to:

A lump sum payment made for a accidental dismemberment

A single premium joint and survivorship deferred variable life annuity would have all of the following characteristics except

A tax free death benefit

Which of the following is true about the net insurance protection provided by a whole life insurance policy?

It decreases as the cash value increases

A policyowner surrendered a non-participating whole life policy for $15,000 cash value. The policyowner had paid a total of $7,000 in premiums. The federal income tax effect would be:

$8,000 taxable, $7,000 tax free

In which of the following contracts is the death benefit called the principal sum?

AD&D

Type of policy that offers the policy owner the options to adjust the policy's face amount, premium and length of protection without ever having to complete a new application or have another policy issued: Variable life

Adjustable life

The incorrect statement pertaining to life insurance premiums would be:

An insurer assumes it will earn a high rate of interest on its invested premiums when establishing premium rates

Single premium whole life policies:

Are always modified endowment policies

Cash value in a variable life insurance policy are calculated on a

Daily basis

Each of the following is a true statement addressing fixed annuities, except:

During the annuitization phase there is always a beneficiary

Which of the following types of policies is designed primarily for the accumulation of funds within a specified period of time and provides protection in the amount of the contract's face value during that time?

Endowment

An equity indexed life policy

Is tied to a securities index like the S&P 500

The following are features of the Equity Indexed Universal Life except

Sale of this product requires a securities license

All of the following are qualified retirement plans except:

Split dollar

A life insurance policy that will pay the face amount if the insured dies anytime during the premium paying period, but nothing if the death occurs after the premium paying period ends is called:

Term insurance

Which of the following is incorrect regarding a Variable Universal Life policy?

The death benefit is guaranteed

The false statement about Universal Life is:

The growth of cash values that exceeds the guaranteed rate is subject to current income taxation

Of the following factors, which is not considered in determining how much an annuitant would receive under an annuity payout?

The insurability of the annuitant

All of the following are true about annuities except

They are short term investment funding vehicles

Which of the following policies is an interest-sensitive permanent plan of insurance

Universal Life

A flexible premium, adjustable benefit life insurance contract that accumulates cash value is known as:

Universal life

A policyowner makes an additional premium payment to their Adjustable Life policy, the policy may be affected in all of the following ways except the:

Value of the nonforfeiture options may decrease

The policy type which has a guaranteed fixed minimum death benefit and a fixed premium, but the actual death benefit can increase according to the rate of return earned in the separate account is:

Variable life