Life Insurance

Pure Life

What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and ceases at the annuitant's death?

Ownership interest in a separate account

What are accumulation units in annuities?

Loan values

What are the "living benefits" of whole life insurance?

Option A-level death benefit, and Option B-increasing death benefit

What are the death benefit options in universal life policies?

Cash Surender, Extended Term, and Reduced Paid-up.

What are the three nonforfeiture options in a life insurance policy?

Immediate and Deferred

What are the two classifications of annuities according to the time when annuity payments begin?

Accumulation and Annuitization

What are the two phases of an annuity?

Cash refund and installment refund

What are the two types of refund life annuities?

The annuity's underlying investments

What causes a variable annuity benefit to vary?

Paid-up additions

What dividend option can increase the death benefit of the existing life policy?

Face Amount

What does "level" refer to in level term insurance?

The cash value is converted to the same face amount as in the whole life policy.

What happens to a policy's cash value under an extended term nonforfeiture option?

If the beneficiary dies shortly after payment begin, the balance of the principal will be forfeited.

What is the disadvantage of selecting a life income settlement option?

To provide income the annuitant cannot outlive

What is the main reason for purchasing an annuity?

Other-insured Rider

What is the name for a life insurance policy rider that provides coverage on the insured's family members?

To prevent the policy from lapsing

What is the purpose of establishing the target premium for a universal life policy?

Face Amount

What policy components must decrease in decreasing term insurance?

Reinstatement

What provision allows the policy owner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability?

Immediate annuity

What type of annuity can be purchased with a single premium?

Straight Life

What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?

Limited-pay whole life

What type of life insurance policy is Life-paid up at age 65?

Term Insurance

What type of life insurance policy offers pure life protection?

Single premium whole life

What type of whole life policy generates immediate cash value?

Option A

What universal life option has a gradually increasing cash value and death benefit?

When the premiums paid are more than the cost of the policy

When does the 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?

When the insured reaches age 100

When would a 20-pay whole life policy endow?

Paid-up addition

Which divided option is automatically selected by the company if not chosen by the policy owner?

Extended Term

Which nonforfeiture option is automatically selected by the company if not chosen by the policy owner?

Reduced Paid-up

Which nonforfeiture option provides coverage for the longest period of time?

The policy owner.

Who controls changes in premium payments, face values, and loans in a life insurance policy?

The contingent beneficiary.

Who does the common disaster clause protect?

Annuity Owner

Who possesses all the rights in an annuity?

There is no cash value to borrow against

Why are policy loans not available in term insurance?

Policy proceeds are retained by the insurance company; only the interest is paid to the beneficiary.

With the interest only settlement option, what happens to the policy's death benefit?

Limited-pay whole life

A Whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy?

20-year level term

A policy stated 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 the 20 year period. What type of policy is this?

Annuity

An individual has a contract that will provide him with a certain amount of income for the rest of his life. That is not, however, a life insurance policy. What type of contract does this person have?

Universal Life

Between adjustable life and universal life policies, which one provides more flexibility to the policy owner?

Annually renewable term

Group Life insurance policies are written as what type of insurance?

Single life and Multiple Life annuities

How are annuities classified depending on how many lives they live?

Lump-sum payment

If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer?

Joint Life Annuity

If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, What type of annuity is what?

Whole Life

If an insured terminated membership in group life insurance, to what type of insurance can the insured convert the coverage?

Amount paid in the annuity or the cash value, whichever is greater.

If the annuitant dies before the annuitization period starts, what will the beneficiary receive?

Annuitization Period

In an annuity, the accumulated money is converted into a stream of income in which phase?

Cash value and Death Benefit

In variable universal life insurance, to what policy component does the term "variable" refer to?

Universal Life

In what type of life insurance policies can the policy owner skip premium payments without the policy lapsing?

Annually renewable term

The death protection component in 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 face amount?

It increases each year by the amount cash value increases

Under Option B in a universal life policy, what happens to the death benefit?

Guaranteed and Current

Universal life policies have two types of interest rates. What are they?

Life income with period certain

What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?