MO Life - 22 Life Ins Policy

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Q: Who owns a group life insurance contract?

A: The employer (also known as the sponsor of the group)

Q: Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A: The full death benefit

Q: In annually renewable term policies, what is the annual premium based upon?

A: The insured's attained age

Q: What type of life insurance is best suited to cover a mortgage?

A: Decreasing term

Q: What type of life insurance policy provides permanent protection?

A: Whole life

Q: If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide?

A: Evidence of insurability

Q: In term policies, what happens to the premium throughout the term of the policy?

A: The premium remains level

Q: Why are policy loans not available on term insurance?

A: There is no cash value to borrow against

Q: In a joint life policy, when is the death benefit paid?

A: Upon the first death

Q: When would a 20-pay whole life policy endow?

A: When the insured reaches age 100

Q: When does an adjustable life policy accumulate cash value?

A: When the premiums paid are more than the cost of the policy

Q: Group life insurance policies are written as what type of insurance?

A: Annually renewable term

Q: The death protection component of a universal life policy is expressed as what type of coverage?

A: Annually renewable term

Q: If an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage?

A: Whole life

Q: A policy states that it will pay a specified face amount 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?

A: 20-year level term

Q: What type of premium is charged on a straight life policy?

A: A level premium for the life of the insured

Q: Who is insured under a juvenile life policy?

A: A minor

Q: Whole life policies provide protection until the insured reaches what age?

A: Age 100

Q: What are the characteristics of the group that underwriters will consider before issuing a group life policy?

A: Group's purpose, size, financial strength and turnover

Q: Universal life policies have two types of interest rates. What are they?

A: Guaranteed and current

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

A: Age 100

Q: In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?

A: Universal life

Q: In variable universal life insurance, to what policy component does the term 'variable' refer?

A: Cash value and death benefit

Q: What type of life insurance policy can be changed from a policy with no cash value to one that generates cash value?

A: Convertible term

Q: An individual has just borrowed $10,000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation?

A: Decreasing term

Q: When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured?

A: Evidence of insurability

Q: What is the main advantage of converting from group life insurance to individual coverage?

A: Evidence of insurability is not required

Q: During partial withdrawal from a universal life policy, which portion, if any, will be taxed?

A: Interest earned on the withdrawn cash value

Q: What type of life insurance policy is Life Paid-up at Age 65?

A: Limited-pay Whole Life

Q: A whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy?

A: Limited-pay whole life

Q: What are the "living benefits" of whole life insurance?

A: Loan values

Q: What universal life option has a gradually increasing cash value and a level death benefit?

A: Option A

Q: What is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single Premium?

A: Premium payment mode

Q: What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100?

A: Single premium whole life

Q: What type of whole life insurance policy generates immediate cash value?

A: Single premium whole life

Q: Regarding taxation, how does the cash value of a universal life policy accumulate?

A: Tax deferred

Q: What happens to the premium in an annually renewable term life policy?

A: The premium increases with each renewal

Q: How is the premium determined in a joint life insurance policy?

A: The premium is based on the average age of the insureds

Q: What is the purpose of establishing the target premium for a universal life policy?

A: To prevent the policy from lapsing

Q: Under Option B in a universal life policy, what happens to the death benefit?

A: Under Option B, the death benefit increases each year by the amount of the cash value increases

Q: Between adjustable life and universal life policies, which one provides more flexibility to the policyowner?

A: Universal life

Q: 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 what time period?

A: For 20 years or until the insured's death, whichever occurs first.

Q: What elements of an adjustable life policy can be changed by the policyowners?

A: The amount and payment period of the premium, the face amount, and the period for protection

Q: Who is entitled to the cash values in a life insurance policy?

A: The policyowner

Q: What are the death benefit options in universal life policies?

A: Option A - level death benefit, and Option B - increasing death benefit

Q: A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary?

A: The amount of the loan will be subtracted from the death benefit.

Q: What happens to the cash value when a whole life insurance policy matures?

A: Cash value is paid to the policyowner

Q: What does "level" refer to in level term insurance?

A: Face amount

Q: What policy component must decrease in decreasing term insurance?

A: Face amount

Q: What type of life insurance policy offers pure death protection?

A: Term


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