Chapter 3

A second to die policy would be the most appropriate recommendation for which of the following A. A husband and wife concerned about paying estate taxes after they have died B. a business owner who wants to make sure his wife has enough money to buy the business form his partner if he should die before his partner does C. A corporation conceded that its CEO might die before the end of his employment contract D. Two business partners who are concerned about the future success of the business and want to provide funds to purchase the business form the decedents family

A. A husband and wife concerned about paying estate taxes after they have died

The face amount of insurance is also referred to as the A. Cash Value B. Policy proceeds. C. Surrender value D. Loan value

B. Policy proceeds.

Which rider waves the cost of insurance and expenses if an insured becomes disabled? A. payor benefit B. return if premium C. wavier of monthly deduction D. Accelerated death benefit

C. wavier of monthly deduction

Which of the following are characteristics o funeral life insurance polices A. fixed death benefit for life with premiums may be increased or decreased B. Adjustable death benefit with premiums that are fixed for life C. Two death benefits options with premiums that are fixed for life D. two death benefit options, an adjustable death benefit and flexible premiums

D. two death benefit options, an adjustable death benefit and flexible premiums

Which of the following is not a feature of term life insurance A. Cash Value B. Lower initial cost C. Limited duration D. Pure protection

A. Cash Value

A _______ policy has a death benefit that will increase or decrease over time based on the performance of the separate account, provides a guaranteed minimum death benefits, offers a choice of sub accounts in which cash value may be allocated, and a has fixed premium A. variable life B. variable universal life C. indexed life D. universal life

A. variable life

A vatical settlement is an agreement between a third party and a(n) ______ A. terminally ill insureds spouse and children who don't want to wait until the insured dies to collect the death benefit B. policy owner insuring the life of a terminally ill insured with 2 years or less life expectancy C. Insurance agents representing the family of the terminally ill insured D. Lender who owns the mortgage on a terminally ill insured home or business property

B. policy owner insuring the life of a terminally ill insured with 2 years or less life expectancy

Which of the following products requires a producer to obtain a securities registration in addition to an insurance license in oder to solicit A. variable life B. variable universal life C. indexed life D. current assumption whole life

B. variable universal life

A "level term" policy means that the ________ remains the same throughout the entire policy period. A. Cash value B. Loan value C. Beneficiary D. Face amount

D. Face amount

A producer is explaining the concept of limited-pay life insurance to a 40 year old client. When comparing a straight life policy with a 10 pay life policy, which of the following statements is correct A. A 10 pay life policy will have a lower annual premium than a straight life B. a straight life policy has immediate cash value C. A policy fully paid up in 10 years will endow at the clients age of 50 D. The cash value in a straight life policy will accumulate at a slower rate than the cash value in a 10 pay life

D. The cash value in a straight life policy will accumulate at a slower rate than the cash value in a 10 pay life

A longer-term care rider A. provides an amount equal to the death benefit plus cash value to terminally ill insured expected to die in the next 6 months B. establishes a trust fund for the insured family so that nursing nine care can be paid for with insurance premiums instead of paying premiums directly to the life insurance company C. pays 25% of the death benefit as monthly income for an insured who cannot perform all of the 6 activities D. provides up to 100% of the policy benefits if the insured qualifies for benefit as specified in the rider but will reduce the amount of death benefit protection based on the amount paid under the rider.

D. provides up to 100% of the policy benefits if the insured qualifies for benefit as specified in the rider but will reduce the amount of death benefit protection based on the amount paid under the rider.