Exam FX Chapter 2- Types of Life Insurance Policies
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
What is another name for interest-sensitive whole life insurance?
Current assumption life
Term Insurance
Provides the greatest amount of coverage for the lowest premium. It has no cash value.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit
Who bears all of the investment risk in a fixed annuity?
insurance company
whole life insurance
provides lifetime (permanent) protection and accumulates cash value.
A domestic insurer issuing variable contracts must establish one or more
separate accounts
Adjustable life
can assume the form of either term insurance or permanent insurance
An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an
interest-sensitive whole life
Which type of life insurance policy generates immediate cash value?
Single Premium
Which of the following products will protect an individual from outliving their money?
Annuity
General Account
Fixed rate of return, guaranteed at a minimum level.
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
Universal Life
Implies that the policy owner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again. Policy owner may even skip paying a premium and the policy will not lapse as long as s there is sufficient cash value at the time to cover the monthly deductions for cost of insurance.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio