Types of life policies and Annuities
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
$50,000 because straight life annuity payments stop at the death of the annuitant
If the owner of a whole life policy who is also 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 full death benefit
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of renewal
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
True or False: The premiums from variable products are invested in the insurers general account
False
True or false: the accumulation period does not occur in a deferred annuity
False
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed Amount
What are the three levels of term coverage
Increasing, Decreasing, and level
What are three true statements about Equity Indexed Annuities
Insurance company keeps a percentage of the returns, have guaranteed minimum interest rates, less risky than variable annuities
What best describes annually renewable insurance
It is level term insurance
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend
Straight life
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?
Joint life
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
Which of the following policies would be classified as a traditional level premium contract
Straight Life
What would help prevent a universal life policy from lapsing?
Target premium
What entities are the regulators of variable life insurance
The insurance department, Federal Government, the SEC
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium
Universal Life
Which of the following policies would have an IRS corridor gap between the cash value and the death benefit
Universal life - option A
when does a whole life policy mature
age 100
The current interest rate on an equity indexed annutiy is often based on
an index like the S&P 500
a decreasing term policy has what type of premium
level
A Straight Life policy has what type of premium?
level annual premium
Does the death benefit get reduced on a convertibility option
no
When does a decreasing term policy pay
only in the event of death during the term and there is no cash value
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
the beneficiary
What best describes what the annuity period is?
the period of time during which accumulated money is converted into income payments
What is a true statement regarding premium in term polices
the premium is level for the term of the policy
