Day 2
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
During which of the following annuity periods does an insured make monthly contributions to the annuity for retirement purposes
Accumulation period
Which type of flexible policy allows the insured to change the amount of death benefit, premium or the type of coverage as their needs change?
Adjustable Life
What is a feature of a variable annuity?
Benefit payments are not guaranteed
What provision allows the policyowner at the end of the term the right to change the policy to a permanent insurance policy without evidence of insurability?
Convertible Provision
When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policy is best suitable for that need?
Decreasing term
What are the two components of a universal policy?
Insurance and cash account
What is true regarding joint & survivorship life policies?
Its designed to insure two or more lives and the premium is based on the average age
A life insurance policy covering the lives of two or more people designed to pay proceeds after the first person dies is called
Joint life
A deferred annuity can be purchased with a single or periodic premium. Which two terms are associated with periodic premium payment options for annuities?
Level or flexible
Which Universal Life option has a level death benefit and a required IRS corridor between the face amount and the cash value?
Option A
Wich Universal LIfe option has an increasing death benefit?
Option B
What parties are included to an annuity?
Owner; annuitant; beneficiary
A policy that is a combination of annually renewable term and cash value that grows at current interest rates is
Universal Life
What is true regarding the premium of a whole life policy
remains level
An annually renewable term policy
renews each year with an increased premium and the face amount stays the same
Equity indexed annuities
seek higher returns
What type of life insurance policy can be purchased with a one time lump sum payment and generates immediate cash value?
single premium
The time period during which the annuitant starts to receive payments from an annuity is called
the annuity period
The insurance component of a Universal Life policy is what type of insurance?
Annual Renewable Term
What characteristic makes whole life permanent protection?
Coverage till age 100
A life insurance policy that is a combination of a Decreasing Term with a Cash Value
Whole Life
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy
Which of the following best describes annually renewable term insurance?
It is level term insurance
What are the statements about term insurance are correct
Pays benefit only if the insured dies during a specified period, can be renewed and converted, and has no cash value
What is true regarding an annuity?
The annuitant must be a natural person
What is true regarding the accumulation period of an annuity
it is a period during which the payments into the annuity grow tax-deferred
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
the beneficiary
A universal life policy allows the policyowner to skip paying a premium and the policy will not lapse as long as
there is enough cash value in the policy to cover the premium amount
The main difference between immediate and deferred annuities is
when the income payments begin
An Immediate Annuity has no accumulation period which means it can only be purchased...
with a single premium
Whose life expectancy is taken into consideration in an annuity?
Annuitant
A type of annuity that begins payment to the annuitant after one year from the date of purchase...
Deferred annuity
An agent selling variable annuities must be registered with
FINRA
What does level, decreasing, and increasing refer to in term insurance?
Face amount
What is the best way to describe the premium of a universal life policy?
Flexible
A type of annuity that begins payment to the annuitant within one year
Immediate annuity
The cash value of a life insurance policy belongs to which of the following?
Policyowner
What provision allows the policyowner at the end of the term the right to continue coverage for another term without proof of insurability?
Renewable provision
Which two terms are associate directly with the way an annuity is funded?
Single payments or periodic payments
Who bears the investment risk in variable life insurance products?
The policy owner
What does a $100,000 20-year level term policy mean?
The policy will expire at the end of the 20yr period, premiums will remain level for 20 yr, if the insured dies before the policy expired, the beneficiary will receive $100,000
What is correct regarding a whole life policy?
The policyowner is entitled to policy loans
What best describes target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
An insured owns a life insurance policy. To be able to pay some bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal Life
Which type of policy has two death benefit options?
Universal Life
If a term life policy is convertible that means that at the end of the policy term, the policyowner may convert coverage to...
a whole life or permanent policy only
What are the three terms for the period of time during which the annuitant receives income?
Annuitization; Pay-out; Liquidation
A contract that van provide income for a specific period of years, or for life and protect against outliving your money is a/an
Annuity
A Return of Premium term life policy is written as what type of term coverage?
Increasing
What are the types of term insurance depending on how the face amount changes during the policy term
Increasing, decreasing, level term
What entities regulate variable life policies
The Guaranty Association
What is annually renewing in a universal policy?
The annually increasing cost of insurance
How are premiums and coverage affected in a Decreasing Term policy?
The coverage decreases gradually but the premiums stay the same
What is true regaarding an increasing term policy?
The coverage increases gradually but the premiums stay the same
The policyowner of an adjustable life policy wants to increase the death benefit. How should this be proceeded?
The death benefit can be increased by providing evidence of insurability
In the Variable Life Policy, where are premiums deposited after expenses are deducted?
The separate account
Selling which of the following policies would require both a life license and a Securities license?
Variable Life
The insured is also the policy owner of a whole life policy. What age must the insured attain in order for the policy to mature and receive the policy's cash value?
100
What is a characteristic of an equity indexed annuity?
Interest rates are often associated with a stock index like the S&P 500
A life insurance policy covering the lives of two or more people designed to pay proceeds only after the last person dies is called
Survivorship life
An insured purchased a 10-year level term policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate
In an adjustable Life policy what can be changed by the policy owner?
The length of coverage, the premium, amount of insurance
The most common type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called
continuous premium (Straight) Life
What are examples of a limited pay policy?
Life Paid-Up at 65; 20-pay Whole Life; Life Paid-Up at 50
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
for 20 years or until death, which ever occurs first
What is true regarding a partial surrender on universal life?
It is not considered a loan; the amount will be deducted from the face amount; a partial surrender is allowed on a universal life policy
What are characteristics of variable life policies?
It is regulated by the SEC & FINRA; There is a guaranteed minimum death benefit; There is no guarangteed interest rate
All other factors being equal, how would the premium in a survivorship life policy compare to the premium in a joint life policy?
It will be lower
An insured has a life insurance policy that requires him to pay premiums for a specified number of years until the policy is paid up and continues to provide protection after the premium paying period has ended is called a
Limited pay policy
What are the different types of whole life insurance?
Single premium, straight life, limited payment
In whole life insurance, what terms describes features such as cash values and loan provisions?
Living benefits
What is considered fix in an Indexed type investment?
It has a fix guaranteed minimum interest rate
Level term insurance provides a level death benefit and a level premium during the life of the policy term. If the policy renews or convert at then end of the policy premium will be...
Adjusted to the insured's age at the time of renewal or conversion
A level term, level premium policy is a type of policy where
Both the coverage and the premiums stays level
With a whole life policy, the death benefit
is fixed and guaranteed