Type of Policies
whaty type of insurance would perform the function of cash accumulation
whole life insurance
what annuity settlement option provided income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years
life income with period certain
with a single premium deferred annuity, when will the annuity payments become available?
no sooner than 1 year after the annuity purchase
what universal option has a gradually increasing cash value and a level death benefit
option A
who bears the investment risk in a fixed annuity?
the insurer
what is the difference between a single premium and flexible premium payment options in a deferred anniuty?
the number of payments that purchase the annuity
Who is entitled to the cash values in a life insurance policy?
the policy owner
what type of annuity requries an agent to have securities license?
variable annuity
a policy stated 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>
20 year level term
why are policy loans not available on term insurance
There is no cash value to borrow against
what are the two phases of annuity
accumulation and annuitizatoin ( or pay in and pay- out
who receives income payment from an annuity?
annuitant
If the annuitant dies during the accumulation period, who will recieve the annuity benefits>
beneficiary
what happens to the cash value when a whole life insurance policy matures?
cash value is paid to the policyowner
what type of life insurance is best suited to cover a mortgage?
decreasing term
what type of annuity credits its interest based upon an index such as S&P 500?
equity indexed annuity
what does the term "level refer to in level term insurance?
face amount
what policy component must decrease in decreasing term insurance?
face amount
What type of life insurance policy is Life Paid -up at Age 65?
limited-pay Whole Life
what type of whole life insurance policy generates immediate cash value?
single premium whole life
what type of annuity is suitable for someone who wnats to select the benefit option that will pay the larges amount only for as long as the annuitant lives?
straight life
whay type of life insurance policy offers pure death protections?
term
what elements of a adjustable life policy can b change by the policyowners?
the amount and payment period of the premium, the face amount and the period for protecton
in variable universal life insurance, to what policy component does the term 'variable' refer?
cash value and death benefit
how long will a life annuity with a 15-year period certain pay?
for the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payment will last for 15 years.
what happens to the premium in an annually renewable term life policy?
the premium increase with each renewal
how is the premium determined in a joint life insurance policy?
the premium is based on the average age of the insureds/
what is the purpose of establishing the target premium for a universal life policy?
to prevent the policy from lapsing
What is the main reason for purchasing an annuity
to provide income that the annuitant cannot outlive
under option B in a universal life policy, what happens to the death benefits>
under option B, the death benefit increase each year by the amount of the cash value increase
In a joint life policy, when is the death benefit paid>
upon the first death
when would a 20 pay whole life policy endow>
when the insured reaches age 100
when does an adjustable life policy accumulate cash value
when the premiums paid are more than the cost of the policy
what type of life insurance policy provides permanent protection?
whole life
whose life expectancy is taken into consideration in an annuity contract>
annuitant
what type of whole life insurance policies only requires a payment of premium at it s inception, and in addition to providing insurance protection for the life of the insured,endow at the insured's age 100?
single premium whole life
in what type of life insurance policies can the policyowner skip premium payments without the policy lapsing
universal life
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?
limited-pay whole life
How soon can income payments begin in an immediate annuity?
no later than 1 year from the time of annuity purchase
If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?
annuitant's estate
In an annuity, the accumulated money is converted into a stream of income during which phase?
annuitization period
what are the death benefit options in universal life policies
option A- level death benefit, and Option B - increasing death benefit
an annuity purchased with multiple payments that begin income payment after one year from the moment of purchase is known as what type of annuity
flexible premium deferred annuity
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 periods?
for 20 years or until the insured's death, whichever occurs first
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?
decreasing term
what are the two classficiation of annuities according to the time when annuity payment begin?
immediate and deferred
What type of annuity can be purchased with a single premium?
immediate annuity
During partial withdrawal from a universal life policy,what portion, if any, will be taxed?
interest earned on the withdrawn cash value
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
joint life annuity
what type of life insurance offer an applicant a cash value element?
permanent insurance (usually, whole life)
regrading annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
the annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant's death
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>
the full death benefit
in annually renewable term policies, what is the annual premium based upon?
the insured's attained age
the death protection component of a universal life policy is expressed as what type of coverage
annually renewable
what type of premium is charged on a straight life policy?
a level premium for the life of the insured
what type of license(s) is/are required to sell variable annuities?
a life insurance license and a securities license
In flexible premium payment annuities , the term flexivle refers to what>
amount of premium
An individual has a contract that will provide him with a certain amount of income for the rest of his life. However, this is not a life insurance policy. What type of contract does this person have>
annuity
if the annuitant dies before the annuitization period starts, what will the beneficiary receive?
beneficiary
can a business or a corporation be an annuitant?
no, an annuitant must always be a natural person