Chapter 4: Types of Life Policies

Survivorship Universal Life (SUL)

covers two people under the same policy and only pays out death benefits after both individuals have died

which of the following is TRUE about credit life insurance?

creditor is the policyowner

single premium whole life (SPWL)

endows for the face value of the policy if the insured lives until the age of 100. The distinguishing feature of this policy is that it generates immediate cash value, due to the lump-sum payment maade by the insurer.

Increasing Term Insurance

provides an increase in the death benefit each year; The coverage usually structured to provide a death benefit equal to the amount of premium paid on a permanent life insurance policy or to provide a death benefit equal to the cash value accumulation in a permanent policy; however it can be written as a stand-alone policy for the individual that has a need for increasing amounts of insurance

which type of life insurance policy generates immediate cash value?

single premium

which of the following life insurance policies is designed to cover two people and pay benefits after both insureds have died?

survivorship universal life

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

the insured's premiums will be waived until she is 21

which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?

variable universal life

an individual purchases 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 his policy?

$100,000

What kind of policy issues certificates of insurance to insureds?

Group insurance

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC Registration

credit life insurance

The creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.

all of the following statements are correct regarding credit life insurance EXCEPT

benefits are paid to the borrower's beneficiary

which of the following elements is an Indexed Universal Life Policy is tied to an index?

cash values

decreasing term policy

contract pays only in the event of death during the term and there is no cash value face amount steadily declines through the duration of the contract the death benefit is $0 at the end of the policy term

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

family term rider

What type of premium do both Universal Life and Variable Universal Life policies have?

flexible

The type of term insurance that provides increasing death benefits as the insured ages is called

increasing term

which of the following best describes annually renewable term insruance?

it is level term insurance

twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

joint life

a married couple owns a permanent policy which covers both their lives and pays the death benefit only upon the death of the first insured, what policy is that?

joint life policy

Option A Death Benefit

the death benefit remains level while the cash value gradually increases, the death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit before the policy matures