Types of life policies
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?
20-year level term
The death protection component of a Universal Life Insurance is expressed as what type of coverage?
Annually renewable term
In variable universal life insurance, to what policy component does term variable refer?
Cash value and death benefit
What type of life insurance is best suited to cover a mortgage?
Decreasing term
What does "level" refer to in level term insurance?
Face amount
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?
For 20 years or until the insured's death, whichever occurs first.
What are the living benefits of whole life insurance?
Loan values
What are the death benefit options in universal life policies?
Option A - level death benefit, and Option B - increasing death benefit
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?
Single premium whole life
What element of an adjustable life policy can be changed by the policyowners?
The amount and payment period of the premium, the face amount, and the period for protection.
Who owns a group life insurance contract?
The employer (also known as the sponsor of the group)
Who is entitled to the cash values of a life insurance policy?
The policyowner
In term policies, what happens to the premium throughout the term of the policy?
The premium remains level
Why are policy loans not available on term insurance?
There is no cash value to borrow against
What is the purpose of establishing the target premium for universal life policy?
To prevent the policy from lapsing
In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?
Universal Life
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
Group life insurance policies are written as what type of insurance?
annually renewable term
Who is insured under a juvenile life policy?
minor
Under Option B in a universal life policy, what happens to the death benefit?
the death benefit increases each year by the amount of the cash value increases
The policyowner of a whole life insurance policy is also the insured. What age must the insured attain in order to recieve the policy's face amount?
Age 100
What is the major difference between the most common types of whole life policies: straight life, limited payment, and single premium?
Premium payment mode
An insured recieves a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
Variable
