Chapter 3 Quiz Questions

Which is true regarding the ins. amount in a credit life policy?

Creditor can only insure the debtor for the amount owed.

A return of premium term life policy is written as what type of coverage?

Increasing

Which statement is not true regarding a straight life policy?

Its premium steadily decreases over time, in response to its growing cash value.

Concerning Juvenile Life insurance:

JL is written on the life of a minor, limited premium payment policy, parent is the applicant for the insurance. its NOT purchased by a minor.

When an insured renews a term 5 years after?...

Premium goes up because he is older and needs to renew

Credit Life Ins:

insurers the life of the debtor

a man decided to buy 100k annually renewable term policy to provide for his children until they graduate. He discovered that his policy:

Required a premium increase each renewal

In group life insurance policy, the employer may not select:

The beneficiary; the employees must be allowed to do that.

15 sky divers wanted cheaper life insurance so they got together. They applied and were rejected for group life. Why?

The purpose of the group was to purchase life insurance.

Which would have an IRS required gap between cash value and death benefit?

Universal Life Option A

When employee terminates coverage under the group, coverage continues in force until:

31 days

to sell variable life ins. policies, an agent must receive:

securities license, life ins. license, FINRA registration, NOT SEC registration

What part of indexed whole life policy is NOT fixed?

cash value growth because it depends on the market.

Which is classified as a traditional level premium contract?

Straight Life

Which employees under a group plan are allowed to convert to individual ins?

Those who have been insured by the group plan for over 5 years.

In survivor-ship life policy when does the insurer pay the death benefit?

Upon the last death

All of the following entities regulate variable life policies:

Federal Gov, SEC, the Ins. Dept., NOT the Guaranty Association

What is an example of limited-pay life policy?

Life Paid-up at age 65

What is false regarding credit life ins.?

Benefits are paid to the borrower's beneficiary

Who is the beneficiary in credit life ins?

creditor

All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A (graph) b/c death benefit stays same for a while

All other factors being equal, the least expensive first-year premium payment is found in:

Annually Renewable term.

Which best describes annually renewable term life ins?

it is level term ins.

All are correct regarding credit life ins. except:

that benefits are paid to the borrower's beneficiary

Which is correct regarding group life statements?

the cost of coverage is based on the ratio of men and women in the group.

Which option allows beneficiary to get death benefit and cash value on death of insured?

Option B (graph)

When would a 20-pay whole life policy endow?

at age 100

In adjustable life policy you cannot:

change the type of investment as the policy owner.

If a life policy increases a lot in face amount or death benefit when insured reaches a specific age, which policy is it?

jumping juvenile policy

Which is not true regarding a decreasing term policy?

the payable premium amount steadily declines throughout the duration of the contract.

Which type of insurance policy generates immediate cash value?

Single Premium Whole Life

What statement about group life is correct?

The cost of coverage is based on the ratio of men and women in the group.

Which aren't considered when underwriting group insurance?

insured's medical history (no need for proving insurable interest)