life and health; life insurance policies
the loan will be subtracted from death benefits
a policyowner borrowed a portion of cash value from his whole life policy. if the loan is not repaid, how will that affect the death benefit to the beneficiary?
decreasing term
an individual has just borrowed $10,000 on a 5-year note from his bank. the note is due in installment. what type of life insurance policy would be best suited to this situation?
universal life
between adjustable life and universal life policies, which one provides more flexibility to the policyowner?
interest earned on the withdrawn cash value
during partial withdrawal from a universal life policy, what portion, if any, will be taxed?
annually renewable term
group life insurance policies are written as what type of insurance?
evidence of insurability
if an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide?
tax deferred
regarding taxation, how does the cash value of a universal life policy accumulate?
no cash value to borrow
why are policy loans not available on term insurance?
limited-pay whole life
a whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy?
average age of the insureds
how is the premium determined in a joint life insurance policy?
whole
if an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage?
upon the first death
in a joint policy, when is the death benefit paid?
the premium remains lever
in term policies, what happens to the premium throughout the term of the policy?
cash value and death benefits
in variable universal life insurance, to what policy component does the term 'variable' refer?
universal life
in what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?
convertible term
what type of life insurance policy can be changed from a policy with no cash value to one that generates cash value?
single premium whole life
what type of whole life insurance policy generates immediate cash value?
the policyowner
what is entitled to the cash value in a life insurance policy?
evidence of insurability is not required
what is the main advantage of converting from a group life insurance to individual coverage?
premium payment mode
what is the major difference between the most common types of whole life policies: straight life, limited payment and single premium?
to prevent the policy from lapsing
what is the purpose of establishing the target premium for a universal life policy?
20-year level term
a policy states that it will pay a specified face amount if the insured dies during the 20 year premium paying period and nothing if death occurs after. what type of policy is this?
annually renewable term
the death protection component of a universal life policy is expressed as what type of coverage?
age 100
the policy owner of a whole life insurance policy is also the insured. what age must the insured attain in order to receive the policy's face amount?
20 years or insured's death
under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premium must be paid for what time period?
benefits increase each year by cash value increase
under potion B in a universal life policy, what happens to the death benefits?
guaranteed and current
universal life policies have two types of interest rates. what are they?
level premium
what type of premium is charged on a straight life policy?
single premium whole life
what type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100?
option A
what universal life option has a gradually increasing cash value and a level death benefit?
when premiums paid are more than the cost of the policy
when does an adjustable life policy accumulate cash value?
evidence of insurability
when the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured?
loan values
what are the "living benefits" of whole life insurance?
group's purpose, size, financial strength, turnover
what are the characteristics of the group that underwriters will consider before issuing a group life policy?
option A- level, option B-increasing
what are the death benefit options in universal life policies?
face amount
what does "level" refer to in level term insurance?
a minor
who is insured under a juvenile life policy?
amount and payment period of premium, face amount, period for protection
what element of an adjustable life policy can be changed by the policyowners?
cash value is paid to the policyowner
what happens to the cash value when a whole life insurance policy matures?
the premium increases with renewal
what happens to the premium in an annually renewable term life policy?
face amount
what policy component must decrease in decreasing term insurance?
decreasing term
what type of life insurance is best suited to cover a mortgage?
limited-pay whole life
what type of life insurance policy is life paid-up at age 65?
term
what type of life insurance policy offers pure death protection?
whole life
what type of life insurance policy provides permanent protection?
when the insured reaches age 100
when would a 20-year whole life policy endow?
the employer
who owns a group life insurance contract?
age 100
whole life policies provide protection until the insured reaches what age?
the full death benefits
whole life insurance policies mature when the insured reaches the age of 100. if the owner of a whole life policy dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefits will be paid to the beneficiary?
