Kaplan Chapter 4

Original Age

Age at the time the original term policy was written

convertability

A ____ feature allows a policyowner to convert a term insurance policy to a permanent type of policy without evidence of insurability and without having to submit an application.

joint life policy (also called first-to-die policies)

A _____ usually covers two or more lives with the death benefit being paid when the first insured dies.

survivorship life policy (second-to-die or last-to-die)

A ______ insures two individuals and will pay the death benefit when the last insured dies.

Indeterminate premium whole life policy

A ______ is similar to a nonparticipating whole life policy except that it provides for adjustable premiums.

single premium whole life policy

A ________ has one payment made at the time of purchase.

Universal life Option B

Increasing death benefit (insurance amount plus cash account)

Attained age

Insured's age at the time of conversion

Universal life Option A

Level death benefit (insurance amount only)

Policy loan

Life insurance policies with a cash surrender value usually have loan provisions (_______) that allow the policyholder to borrow up to the cash value of the policy.

fixed and level

Like its premium, the death benefit of a whole life policy is ________

renewability

The ____ feature, with term life insurance, guarantees that the policy will renew (extend) at the end of its term.

separate account

The ______ is a fund held by the life insurance company and maintained separately from the insurer's general assets.

face amount

The amount of the death benefit is called the _____ because its usually found on the first (face) page of the policy.

increasing term policy

The death benefit of a ____ begins near zero and grows over the term of coverage.

decreasing term policy

The death benefit of a _____ declines over the coverage period until it reaches zero at the end of the term.

level term policy

The death benefit of a ______ equals the face amount throughout the term of coverage.

guaranteed minimum death benefit

The original face amount is the variable life policy ________

guaranteed (level) rate of interest

The policy cash value increases steadily over the life of the contract because it is regularly credited with a ________

straight life; ordinary life

The premiums for this whole life policy are the same each year for the duration of the contract. It is also referred to as ____ or _____

level premium

The purpose of a ______ while whole life policies is to make lifetime coverage affordable at older ages.

death benefit

The whole life policy ____ is payable upon the insured's death.

Variable universal life (also called flexible premium variable life)

Variable life is whole life with a separate account. _____ is universal life with a separate account.

Graded premium whole life policies

____ have an even lower initial premium than modified whole life policies.

Term

____ life insurance policies only offer a death benefit and remain in force for a specified period of time. No death benefit is payable if the insured dies after this term expires.

Return of Premium Term

____ policies will return all or a part of the premium paid for the policy if the insured is still alive at the end of the term.

Variable life insurance

_____ has a separate account instead of guaranteed cash value

Whole Life

_____ is a permanent insurance policy which is guaranteed to remain in force for the insured's entire lifetime provided the required premiums are paid, or to the policy maturity date.

Interest-sensitive whole life (also known as current assumption whole life)

_____ is a type of whole life insurance where the cash value can increase beyond the stated guarantee if economic conditions warrant

Juvenile life insurance

_____ is coverage written on the life of a child or minor.

Universal Life (UL)

_____ was designed for people who want flexible premiums and flexible coverage over the course of their lifetime.

Policy Surrender

_____-The "cash surrender" value of the whole life policy arises from the policyholder's rights to quit the contract and reclaim a share of the reserve fund attributable to the policy.

Variable policies

______ are permanent insurance policies designed to provide lifetime coverage for the insured and have cash value and a death benefit.

Modified premium whole life policies (sometimes called modified whole life policies)

______ have lower premiums during he first three to five years.

Equity-indexed universal life

______ is a permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index such as the Standard and Poor's 500 Index.

Cash values

_______ are an integral part of a whole life policy, and reflect the reserves necessary to assure payment of the guaranteed death benefit.

Limited-payment whole life

________ policies allow for a lifetime of premiums to be paid in a shorter period of time