Chapter 4
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
Family Maintenance Policy
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:
Modified Whole Life
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term life
What kind of life insurance product covers children under their parent's policy?
Term rider
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:
The cost of insurance
A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
Universal Life
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal life
Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?
Universal life
A(n)______ Life Policy offers the owner investment in products such as money-market funds, long-term bonds and equities
Variable
How long does the coverage normally remain on a limited-pay life policy?
Age 100
A Whole Life Insurance Policy endows when the:
Cash value equals the death benefit
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the:
Cost of insurance
Credit life insurance is typically issues with which of the following types of coverage?
Decreasing Term
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing term
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
All of these are characteristics of an Adjustable Life policy, EXCEPT:
Face amount can be adjusted using policy dividends
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face amount plus the policy's cash value
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance policy
Which of the following actions require a policyowner to provide proof of insurability in a n Adjustable Life policy?
Increase face amount
Credit Life insurance is:
Issued in an amount not to exceed the amount of the loan
What type of life policy covers 2 lives and pays the face amount after the first one dies?
Joint Life Policy
Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?
Joint life
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:
Limited Pay Life
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 of these life products is NOT considered interest-sensitive?
Modified Whole life
Who benefits in Investor-Originate Life Insurance (IOLI) when the insured dies?
Policyowner
Which is true concerning a Variable Universal Life Policy?
Policyowner controls where the investment will go and selects the amount of the premium payment.
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
Which of the following actions is NOT possible with a Universal Life policy?
Premiums may be applied as a credit against income tax
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Renewable Term policies
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?
Ten-Year Endowment
A life insurance policy that provides a policyowner with cash value along with a level face amount is called:
Whole life
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
Whole life
