XCEL: Chapter Exam 1 (Life Policies)

Which statement is TRUE regarding a Variable Whole Life policy?

A minimum guaranteed Death benefit is provided

How long does the coverage normally remain on a limited-pay life policy?

Age 100 (Even though the premium payments are limited to a certain period, the insurance protection extends until the insured's death, or to age 100)

Which statement about a whole life policy is true? A. Beneficiary may be charged only with the consent of the premium payor B. Death benefit can usually be adjusted C. Cash value may be borrowed against D. Premiums are flexible

C. Cash value may be borrowed against

S is covered by a whole life policy. Which insurance product can cover his children?

Child term rider (means of providing life insurance on the children of a person who is covered by a child term rider)

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy

Term insurance has which of the following characteristics?

Expires at the end of the policy period

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

Level term

K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?

Modified Whole Life

Which statement is correct regarding the premium payment schedule for whole life policies?

Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured. (With whole life insurance, premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death)

Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of these policies should Q purchase?

Term Life

Whole life insurance is sometimes referred to as "Straight Life". What does the word "Straight" indicate when using this phrase?

The duration of premium payments

Which of the following Life insurance policies combine term insurance with an investment element?

Universal Life

A ___________ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities

Variable

A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:

Variable Life

When is the face amount if a Whole life policy paid?

When the insured dies or at the policy's maturity date, whichever happens first

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, expense charges, and the

cost of insurance

The investment gains from a Universal Life Policy usually go toward

the cash value

The amount of coverage on a group credit life policy is limited to

the insured's total loan value

Under a Graded Premium Whole Life policy,

the premium increases each year during the early years of the contract and remains the same after that time

Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period

varies according to the contract