finance quiz 2

Which of the following is NOT true regarding an annuity certain?

Benefits stop at the annuitant's death.

What characteristic makes whole life permanent protection?

Coverage until death or age 100

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

The death benefit under the Universal Life Option B

Gradually increases each year by the amount that the cash value increases

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Required a premium increase each renewal.

Which type of life insurance policy generates immediate cash value?

Single Premium

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

Which of the following is TRUE regarding variable annuities?

The annuitant assumes the risks on investment

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

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?

It does not guarantee that the entire principal amount will be paid out.

Which statement is NOT true regarding a Straight Life policy?

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

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level term

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?

an annuity

The term "fixed" in a fixed annuity refers to all of the following EXCEPT

death benefit

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

deferred

Which of the following is another term for the accumulation period of an annuity?

pay period

For variable products, underlying assets must be kept in

separate account

A domestic insurer issuing variable contracts must establish one or more

separate accounts

An insured owns a life insurance policy. To be able to pay some of her medical 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