Life and Health Chapter 3

Ordinarily, who would not be the owner of a juvenile policy from the outset? a. A brother or sister b. A father c. A mother d. A grandparent

a. A brother or sister

A Last-to-Die policy would be the most appropriate recommendation for which of the following?

A husband and wife concerned about paying estate taxes after they have died

A producer is explaining the concept of limited-pay life insurance to her client. Which of these statements is incorrect?

By paying over a shorter period of time, each of the payments will be lower

Which of the following is not a feature of term life insurance?

Cash value guarantees

Which of the following are characteristics of universal life insurance?

Death benefit options, death benefit, and premiums may be changed

Which of these best describes a disability income rider?

Pays a percentage of the death benefit as monthly income to the insured when totally disabled

A _______________ policy has a death benefit that can increase or decrease over time based on stock market performance, a guaranteed minimum death benefit, a choice of subaccounts in which cash value may be allocated, and a fixed premium.

Variable Life

Which of the following Whole Life insurance policies has the lowest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? a. Ordinary Straight Whole Life b. 30-Pay Ordinary Life c. Limited Pay Ordinary Whole to age 85 d. 20-Pay Ordinary Life

a. Ordinary Straight Whole life

Whole Life is also known as ________ protection. a. Permanent b. Periodic c. Temporary d. Absolute

a. Permanent

A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force when the insured dies at age 65. The beneficiary receives how much of the policy's values? a. $70,000 b. $100,000 c. 30,000 d. $130,000

b. $100,000

If Mary is 30 years old and buys a 15 Pay Life policy, how old will Mary be when she stops paying premiums? a. 100 b. 45 c. 60 d. 50

b. 45

Jacob owns a policy that pays a death benefit only if he dies within the 20-year policy period. If Jacob dies anytime that the policy is in force, his beneficiary will receive $100,000. The premium that Jacob pays for this policy will be the same throughout the 20-year policy period. Jacob owns: a. A Decreasing Term policy b. A Level Term policy c. A Re-Entry Term policy d. An Increasing Term policy

b. A level term policy

What is a way to provide additional life insurance protection for a temporary period of time without having to acquire an additional life insurance policy? a. Choose death benefit option B on a Variable Universal Life insurance policy b. Add a term rider to a new or existing policy c. Buy a Joint Life policy d. Choose death benefit option B on a Universal Life insurance policy

b. Add a term rider to a new or existing policy

Which rider allows a disabled insured policyowner to forgo future premiums on his or her whole life insurance policy while continuing to enjoy full policy benefits? a. Living Needs b. Waiver of Premium c. Waiver of Cost of Insurance d. Cost of Living Benefit

b. Waiver of Premium

Which of the following policies cannot have a premium payment period of less than to age 100? a. Adjustable Life b. Limited Pay Life c. Ordinary Straight Whole Life d. Indeterminate Premium

c. Ordinary Straight Whole Life

Which of the following would have the highest first-year annual premium for a 30-year-old, all other factors being equal? a. Term to age 50 b. Term to age 60 c. Term to age 70 d. Term to age 40

c. Term to age 70

All of the following are characteristics of Universal Life Insurance, except: a. The policyowner may determine the amount and mode of premium payments b. Each month a mortality charge is deducted from the policy's cash value for the cost of the insurance protection and expenses c. The policyowner can choose which investment(s) to place the cash values into from those available d. The policyowner has the option to adjust the death benefit up or down

c. The policyowner can choose which investment(s) to place the cash values into from those available

A $100,000 policy with a waiver of premium rider and $30,000 of cash value is in force. The base policy costs $750 and the rider is $50. What is the total premium annually the policyowner must pay to keep the policy in force if the policyowner decides to cancel the rider? a. $700 b. $800 c. $50 d. $750

d. $750

Annually renewable term life insurance's premiums increase every: a. 15 years b. 5 years c. 10 years d. 1 Year

d. 1 year

Which Term Life insurance policy would have the highest initial premium, all else being equal? a. 5-year Term b. 10-year Term c. 1-year Term d. 20-year Term

d. 20-year Term

The normal waiting period for benefits under the disability income rider is: a. 60 days b. 1 year c. 30 days d. 3 to 6 months

d. 3 to 6 months

Which type of term protection has an increasing face value as the insured gets older? a. Convertible Term b. Level Term c. Renewable Term d. Increasing Term

d. Increasing term

How would a term policy normally be used to pay off a mortgage upon death? a. By using the policy as collateral for a policy loan b. By using the policy's cash values c. Through a viatical or life settlement d. Using the death proceeds after the insured has died

d. Using the death proceeds after the insured has died

Permanent insurance is designed to provide coverage ___________. a. For a specified period of time b. For a temporary period of time c. To age 65 d. For an entire lifetime

d. for an entire lifetime

Each of the following are characteristics of a Current Assumption Whole Life insurance policy, except: a. The insurance company can change the premium b. The insurance company can change the interest rate credited to the policy c. If interest rates increase premiums can be reduced or cash values can increase at a faster rate d. The death benefit is not guaranteed

d. the death benefit is not guaranteed

Even though this rider can pay out upon death, it also pays out a benefit if the insured loses a limb, eyesight, or hearing as a result of an accident. What is this rider benefit called? a. Reattachment b. Indemnity c. Dismemberment d. Reimbursement

Dismemberment

A "level term" policy means that the _____________ remains the same throughout the lifetime of the policy.

Policy proceeds

What does a long-term care rider offer that a Living Needs rider does not?

Provides up to 100% of the death benefit in a daily or monthly amount for the non-hospital expenses of a chronically ill person who cannot perform any 2 of the 6 activities of daily living

What "jumps" in a jumping juvenile policy?

The face amount jumps one time, usually to five times the amount of insurance, at age 21 or 25

When a whole life policy endows, what happens to the policy's cash value?

The face amount of the policy is paid to the policyowner

The face amount of insurance is also referred to as the:

The limit of liability

A viatical settlement is made between the purchaser of a person's life insurance policy and ____________________.

The terminally ill insured who must receive at least as much as would be available from the insurance company under any full cash surrender or living needs rider

An insured purchases a 20-Pay Life Policy with a face amount of $25,000 and an annual premium of $1,000. The insured dies 15 years later when the cash value is $5,000. What amount will the beneficiary receive? a. $25,000 b. $15,000 c. $30,000 d. $20,000

a. $25,000

If Alvin purchases a Variable Universal Life Policy with a face amount of $250,000, and chooses death benefit Option B, upon his death the amount of the benefit payable to the beneficiary would be _________ if the policy had $25,000 in cash values. a. $275,000 b. $225,000 c. $250,000 d. Nothing

a. $275,000

What is the typical time limit on life expectancy for a Viatical Settlement candidate? a. 2 years b. 5 years c. 3 years d. 4 years

a. 2 years

How much of a cash value policy loan will an insurer normally grant with a variable type policy? a. 75-90% b. 100% c. 80-90% d. 50-75%

a. 75-90%

The Double Indemnity Rider requires that the insured die within _____ days of the accident. a. 90 b. 365 c. 120 d. 180

a. 90

What is the name of the rider (benefit) that, in the event of a claim, the policy normally pays double or triple the face amount if death was a result of an accident. a. Accidental Death b. Occupational c. Auto Insurance d. Additional Indemnity

a. Accidental death

Which of the following situations will require proof of insurability? a. Adjusting the face amount up on a Universal Life insurance policy with Option A death benefit selected b. Current Assumption Whole Life when the interest crediting is so favorable that the insurer adds a corridor of protection to keep the policy from endowing c. Universal Life insurance with Option B death benefit as the cash values grow due to additional premium payments and favorable interest rate crediting d. Variable Whole Life insurance as the cash values grow due to favorable separate account investment earnings

a. Adjusting the face amount up on a Universal life insurance policy with Option A death benefit selected

Which of the following best describes the return of premium rider? a. An increasing term benefit that matches the cumulative premiums paid b. An increasing term benefit that matches the cash value accumulation c. A benefit similar to waiver of premium, but is free of charge d. A level term rider in the amount of 20 annual premiums

a. An increasing term benefit that matches the cumulative premiums paid

The cash value accumulation in a life insurance policy: a. Can be used for loans or later as retirement income b. Is always equal to the death benefit c. Can only be accessed by the named beneficiary d. Can only be used when the policy endows

a. Can be used for loans or later as retirement income

Adjustable life allows the policyowner to do all of the following, except: a. Change the insured b. Adjust the premium c. Adjust the premium paying period d. Adjust the death benefit

a. Change the insured

Mortgage or credit life refers to what type of life insurance coverage? a. Decreasing term b. Level term c. Increasing term d. Renewable term

a. Decreasing term

Which of the following is a type of life insurance that provides an amount of coverage that diminishes while the policy is in effect and is most often used to pay an outstanding loan or mortgage balance upon the death of the insured? a. Decreasing Term b. Renewable Term c. Split Level Term d. Ordinary Term

a. Decreasing term

The ________ is the amount payable to the beneficiary upon death of the insured named in a life insurance policy. a. Face amount b. Cash value c. Loan value d. Premium refund

a. Face amount

The current rate of interest paid to the cash value account of a universal life policy consists of: a. Guaranteed interest plus equity earnings b. Excess interest plus equity earnings c. Guaranteed interest plus excess interest d. None of the answers listed

a. Guaranteed interest plus excess interest

What happens to the overall annual premium cost once a term rider expires? a. It decreases b. It stays the same c. It begins to vary d. It increases

a. It decreases

What is the name of a single policy covering two or more lives that pays benefits upon the death of the first insured? a. Joint Life b. Universal Life c. Joint Survivorship Life d. Accidental Death

a. Joint Life

All of the following are life insurance disability riders, except: a. Jumping Juvenile b. Waiver of Premium c. Payor Benefit d. Disability Income Benefit

a. Jumping juvenile

A life insurance applicant wants a combination of savings and insurance protection with guarantees. If the applicant is willing to pay premiums only until the age of 65, at which time the policy is fully paid-up, which of the following should he/she purchase? a. Limited Pay Whole Life-Age to age 65 b. An Ordinary Straight Whole Life policy with a Level Term rider to age 65 c. Adjustable Life with a large death benefit and minimal premiums d. Indeterminate Premium Whole Life

a. Limited Pay Whole Life-Age to age 65

Which of the following term policies cost the least all other factors being the same? a. Nonrenewable and non-convertible b. Renewable and non-convertible c. Renewable and convertible d. Nonrenewable and convertible

a. Nonrenewable and non-convertible

The nonforfeiture option that provides the least amount of coverage is: a. Reduced Paid-Up b. Automatic Premium Loan c. Extended Term d. Convertible Term

a. Reduced Paid-Up

Which of the following term life insurance policies would be the most expensive, everything else being equal at the time of issuance? a. Renewable and Convertible b. Convertible c. Renewable d. Non-Renewable and Non-Convertible

a. Renewable and Convertible

An insured dies within the time limit of an Increasing Term Rider and the beneficiary receives the face amount plus the value of all paid premiums. Which rider is attached to the policy? a. Return of Premium b. Return of Cash Value c. Term to age 100 d. Waiver of Premium

a. Return of premium

Sara applies for a $100,000 30 year level term life insurance policy. The producer quoted her a price of $750 annually if issued as applied for. She wants to make sure that the policy premiums are taken care of just in case she has a total disability. The policy is issued but the premium is now $825. What is the most likely reason why the overall premium increased? a. Sara now has added a waiver of premium rider, which requires an additional premium payment b. Sara just increased the face amount of the policy and the premiums reflect that c. Sara was most likely issued a policy type other than applied for d. The policy was not issued at the underwriting class quoted

a. Sara now has added a waiver of premium rider, which requires an additional premium payment

The owner of a Variable Life Policy may allocate the premium into a sub-account which is owned by the insurer, this sub-account is a part of what is also known as the: a. Separate Account b. Side Fund c. Allocation Account d. Accumulation Account

a. Separate account

Who pays all future premiums after the Viatical Settlement? a. The Viatical Company b. The Insured's Beneficiary c. The Policyowner d. The Insured

a. The Viatical Company

Should an insured become totally and permanently disabled two months before the cut-off date for the waiver of premium rider: a. The insured remains eligible for all provisions b. No benefits would be available due to the 6 month elimination period usually required, which would exceed the 2 months remaining on the rider c. The waiver of premium will only continue for the remaining two months d. All provisions in the policy are now voided

a. The insured remains eligible for all provisions

All of the following are reasons why a new policy issued through a term conversion costs more, except: a. The insured's health has changed for the worse b. The new policy was issued at the attained age c. The new policy has cash values d. The new policy is permanent

a. The insured's health has changed for the worse

Equity Universal, Variable, and Variable Universal all have which of the following characteristics in common? a. The overall policy performance has something to do with the stock market in general b. The owner chooses the separate account(s) to invest the cash values in c. All have a guaranteed death benefit d. A securities license is required to sell each policy

a. The overall policy performance has something to do with the stock market in general

Each of the following choices are true of whole life, except: a. The policy can be converted into a term life insurance plan at anytime b. The death benefit and cash values are guaranteed c. As an insured ages, the premiums remain the same d. They have nonforfeiture values and options are offered

a. The policy can be converted into a term life insurance plan at any time

All of the following are true about indeterminate premium whole life policies, except: a. They are like participating whole life b. There is a maximum guaranteed premium stated in the policy c. The company charges a current premium based on current estimates d. The policy has adjustable premiums

a. They are like participating whole life

Increases in insurance protection to keep a Current Assumption policy from endowing is provided: a. Without evidence of insurability b. With simply part 1 of the application completed c. With limited underwriting d. With full underwriting

a. Without evidence of insurability

Loan values and retirement income are: a. Called the living benefits of life insurance b. Features that are only available on term policies c. Not available from any type of life insurance policy d. Considered part of the final expenses of life insurance

a. called the living benefits of life insurance

Premiums for a variable universal life policy: a. Can vary in amount as well as payment schedule b. Are fixed and must be paid at the specified intervals c. Are fixed but may vary in payment schedule d. Are determined by using the AIR method of rate calculation

a. can vary in amount as well as payment schedule

The cash value of a variable life policy: a. Is determined by the investment experience of the separate account b. Is never at any risk c. Is determined by the insurers general account performance d. Offers a variable interest rate with a stated guaranteed minimum rate included

a. is determined by the investment experience of the separate account

A universal life policy with a back-end load: a. Makes a service charge when the policy is surrendered b. Causes the cash value to accumulate slower than that of a front end load c. Adds a service charge to each premium to cover operating expenses d. Is applied anytime a policyowner surrenders a policy prior to age 59 1/2 and is imposed by the IRS

a. makes a service charge when the policy is surrendered

Jill, whose policy contains a waiver of premium rider, becomes disabled for two years during which time the company pays over $400 in premiums. Jill recovers and now must: a. Begin paying a substandard rated up premium due to her recent disability b. Begin paying the premiums as they become due c. Remove the waiver of premium rider on the policy d. Cancel the policy and start over

b. Begin paying the premiums as they become due

______________ is a form of whole life in which the insurance company can change the premiums or interest rate being credited to the account based on current money market rates. a. Adjustable Life b. Current Assumption Whole Life c. Traditional Whole Life d. Universal Life

b. Current Assumption Whole Life

Any extra premium charged for the waiver of premium rider: a. Increases the face amount of the policy b. Does not apply to the policy's cash value c. Must be paid separately and in addition to the primary premium d. Earns interest and increases the cash value of the policy

b. Does not apply to the policy's cash value

When the life insurance policy's cash value equals the face amount of the policy and the proceeds are paid to the policyowner, this is known as the policy's _________. a. Conversion b. Endowment c. Reinstatement d. Renewal

b. Endowment

The situation below that most likely calls for the purchase of term insurance is: a. Roger is age 62 and is approaching retirement after working for a corporation for 30 years b. George has two years of medical school to complete; he and his wife have one child c. Kathy, age 60 and married, has two adult children, both of which are married d. Mary is 44 years old, is a career school teacher and has no children

b. George has two years of medical school to complete; he and his wife have one child

Ed purchased policies on behalf of his grandchildren. He wanted to be certain they could purchase additional policies at specified ages. He was able to do this by adding which rider? a. Cost of Living Rider b. Guaranteed Insurability Rider c. Child Rider d. Waiver of Premium Rider

b. Guaranteed Insurability Rider

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. He applies for and receives a $10,000 policy loan from the insurer. All of the following about this transaction are true, except: a. The loan carries a fixed or variable interest rate b. If C were disabled, his beneficiaries would receive $70,000, less any outstanding interest charges c. If C died, his beneficiaries would receive $90,000, less any outstanding interest charges d. If the policy is surrendered, C would receive $20,000 less any outstanding interest charges

b. If C were disabled, his beneficiaries would receive $70,000, less any outstanding interest charges

Which of the following types of term life insurance can be written as a rider to provide cost of living or return of premium benefits? a. Variable term b. Increasing term c. Decreasing term d. Level term

b. Increasing term

Of the following, which best describes a Straight Whole Life Policy? a. Increasing premium and level death benefit for the life of the insured b. Level guaranteed premium and face value for the life of the insured c. Decreasing face amount and level premiums d. Increasing cash value and decreasing premiums

b. Level guaranteed and face value for the life of the insured

Quentin, age 65, has a life insurance policy he no longer needs and no longer can afford, but he does have a need for cash. XYZ Inc. purchased his policy for less than the face amount but more than the cash value and is now the policyowner and premium payor. This was which of the following transactions? a. Buy/Sell Agreement b. Life Settlement c. Viatical Trust Settlement Agreement d. Living Needs Transaction

b. Life Settlement

The purpose of the Re-Entry Term option is to: a. Obtain a permanent plan of insurance that builds cash value b. Obtain a new term policy at a lower rate c. Continue on with the existing policy but with a larger face amount d. Extend the length of time the original policy can be in effect

b. Obtain a new term policy at a lower rate

A rider is usually requested at the time of ____________. a. Claim b. Policy Purchase c. Conversion d. First policy renewal

b. Policy Purchase

Warren and Wilma have a joint life policy. Warren dies and the policy pays nothing. Later on, Wilma dies and the policy death benefit is paid to the beneficiary. This is called a: a. Variable life policy b. Survivorship or second-to-die policy c. Level term policy d. Reduced paid up policy

b. Survivorship or second-to-die policy

All of the following provisions of an adjustable life policy may be changed to meet the policyholder's needs, except: a. The face amount of the policy b. The person named as the insured on the policy c. The amount and/or frequency of premium payments d. The period of insurance protection

b. The person named as the insured on the policy

If a policyowner has a whole life insurance policy with a disability waiver of premium rider, when does the rider benefit start if a qualifying disability should occur? a. One year after the claim forms are received by the insurer b. Typically 6 months after the disability occurs c. Immediately d. After the doctor certifies the disability

b. Typically 6 months after the disability occurs

A __________ is a contractual agreement that allows a company or person to buy one or more of the rights of ownership in a life policy on the life of another person, should the owner/insured become terminally ill. a. Living Needs Rider b. Viatical Settlement c. Leveraged Insurance Agreement d. Emergency Fund Rider

b. Viatical settlement

In a viatical settlement, the life insurance policyowner is referred to as the _________. a. Beneficiary b. Viator c. Buyer d. Settler

b. Viator

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. What is the maximum loan C can obtain from the insurer using the policy as collateral for the loan? a. $100,000 b. $130,000 c. $30,000 d. $70,000

c. $30,000

C has a $100,000 traditional whole life insurance policy with a $30,000 cash surrender value. What is the insurer's net amount at risk? a. $30,000 b. $130,000 c. $70,000 d. $100,000

c. $70,000

Which of the following Whole Life insurance policies has the highest annual premium payment per $1,000 of coverage for a 35-year-old, all other factors being equal? a. Ordinary Straight Whole Life b. 30-Pay Ordinary Whole Life c. 20-Pay Ordinary Whole Life d. Limited Pay Ordinary Whole Life to age 85

c. 20-Pay Ordinary Whole Life

Joe has a whole life policy with a guaranteed insurability rider. He was 21 at the time the policy was issued. If he exercises all of the options at the ages specified under the typical rider, how many policies will he end up with? a. 3 b. 2 c. 7 d. 6

c. 7

An indeterminate premium whole life policy has _______ premiums. a. Inflexible b. Increasing c. Adjustable d. Decreasing

c. Adjustable

What happens to the cash values in a whole life policy if an insured is on claim with a waiver of premium rider? a. They are reduced by the cost of the rider b. They are reduced by the total cost of the policy c. Cash value and dividends continue as if normal premium payments have been made d. The cash value remains the same, it is frozen until regular premium payments resume

c. Cash value and dividends continue as if normal premium payments have been made

Level, decreasing and increasing term refer to which policy feature? a. Cash value b. Renewable and Convertible c. Death benefit d. Premium

c. Death benefit

All of the following are true regarding Current Assumption Whole Life, except: a. The insurer may have to add a corridor of insurance protection to keep the policy from endowing b. The policy has a guaranteed minimum death benefit c. If current rates decrease, the policyowner pays reduced premiums, or the cash values will grow faster d. Interest rate changes affect policy premiums

c. If current rates decrease, the policyowner pays reduced premiums, or the cash values will grow faster

Most group life insurance has a(n) ______ term death benefit. a. Variable b. Increasing c. Level d. Decreasing

c. Level

The death benefit of a variable life policy: a. Is never guaranteed b. Always remains level c. May go up or down but will never fall below the face amount of the policy d. Is totally at risk

c. May go up or down but will never fall below the face amount of the policy

Bert is the owner and insured of a permanent life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage? a. Reduce the policy's face amount which will reduce his premium payment b. Surrender part of the policy and for the balance take a policy loan c. Take a policy loan from the insurer d. Surrender the policy back to the insurer

c. Take a policy loan from the insurer

Which of the following would have the lowest first-year annual premium for a 30-year-old, all other factors being equal? a. Term to age 60 b. Term to age 70 c. Term to age 40 d. Term to age 50

c. Term to age 40

Which of the following is not a form of permanent life insurance coverage? a. Indeterminate premium whole life b. Adjustable life c. Term to age 70 d. Ordinary straight whole life

c. Term to age 70

Universal Life is similar to Whole Life in all of the following ways, except: a. Cash values accumulate based on premium deposits and interest b. Any internal cash value growth is tax-deferred c. The timing and amount of premium is flexible d. It provides a death benefit

c. The timing and amount of premium is flexible

What is the primary incentive for a third party to acquire a life insurance policy from a terminally ill insured? a. To help those in desperate need b. To create a secondary market for existing in-force life insurance policies c. To profit at the time of claim d. To perform an act of charity

c. To profit at the time of a claim

The number of years excluded from the conversion privilege on a convertible term policy: a. Is 15 years b. Is 8 years c. Varies among insurance companies d. Is 10 years

c. Varies among insurance companies

If an insured is concerned about being unable to pay the premiums on his or her whole life policy in the event of a total disability, which of the following riders should be added to the policy? a. Waiver of Cost of Insurance b. Payor Benefit c. Waiver of Premium d. Disability Income Benefit

c. Waiver of premium

What is the fastest way to pay up a traditional whole life policy? a. Double up on premium payments b. Use the dividend features available c. Borrow against the policy's cash values to pay off any premium balance d. Buy a single premium policy

d. Buy a single premium policy

The cash value of a variable life policy: a. Is determined by the insurers general account performance b. Is never at any risk c. Offers a variable interest rate with a stated guaranteed minimum rate included d. Is determined by the investment experience of the separate account

d. Is determined by the investment experience of the separate account

Variable Whole Life has all of the following features, except: a. The owner may select which separate account they want their premium to be invested in b. The policy provides for both a general account and a separate account c. The premium is determined by the insurer and remains fixed and level throughout the contract d. Partial surrender are allowed

d. Partial surrender are allowed

Mary decides to convert her Term Policy to permanent protection. Which of the following statements is true regarding the conversion? a. She may convert after proof of insurability b. She may convert at any time c. Premiums and the amount of coverage remain the same d. She may convert without evidence of insurability

d. She may convert without evidence of insurability

All of the following statements regarding the Living Needs Rider are true, except: a. The rider is most often added without an additional premium charge b. It allows a partial payment of the face amount before death if the insured becomes terminally ill c. At death, the early payment is deducted from the beneficiary's benefit d. The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit

d. The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit

When the cash value account of a universal life policy reaches zero, the policyowner must make a premium payment or: a. The policy is lapsed b. The policy becomes void c. The reduced paid-up nonforfeiture option is automatically exercised d. The policy goes into the grace period

d. The policy goes into the grace period

Which of the following pays a current interest rate and also guarantees a minimum interest rate that will be credited to the cash values of the life insurance policy? a. Variable Whole Life b. Variable Universal Life c. Ordinary Whole Life d. Universal Life

d. Universal Life