Life Insurance

Which of the following policies has a level face amount with level premiums?

Level premium term, also called level premium level term, has a level face amount and level premiums. Premiums tend to be higher than annual renewable term because they are level throughout the policy period. The correct answer is: Level premium term

Which term policy has level premiums and a level face amount?

Level premium term, also called level premium level term, has a level face amount and level premiums. Premiums tend to be higher than annual renewable term because they are level throughout the policy period. The correct answer is: Level premium term

___________ policies have premiums that fluctuate between the current rate and maximum rate, as stated in the policy.

Indeterminate premium policies have premiums that fluctuate between the current rate and maximum rate, as stated in the policy. The fluctuating premiums account for the insurer's actual mortality expense and investment experience. The correct answer is: Indeterminate premium

Which of the following characteristics does not describe convertible term life insurance policies?

The original age is the insured's age upon purchase of the term life insurance policy. The correct answer is: The attained age is the insured's age upon purchase of the term life insurance policy.

What are the two major types of life insurance?

There are two major types of life insurance: permanent (whole) and temporary (term). The correct answer is: Term and whole

Which of the following is not a characteristic of decreasing term life insurance?

Premiums are level in a decreasing term life policy. The policy face decreases to zero by the end of the policy period _ on the day of policy expiration, the face amount equals zero. Decreasing term policies are often called _mortgage reduction insurance_ because they are used to insure a mortgage. The correct answer is: The premium decreases to zero by the end of the policy period.

All of the following characterize term life insurance, EXCEPT:

Term life insurance provides pure death protection (pays a death benefit only). Whole life insurance (permanent protection) provides life insurance for the entire life of the insured. It also is said to provide a living benefit because it accrues cash value, which is available to the policy owner. The correct answer is: Term life insurance provides living benefits (cash accrual).

What are the benefits of a convertible and renewable term life insurance policy?

Renewable and convertible term life policies allow the insured to renew or convert coverage without needing to provide proof of insurability. The correct answer is: Proof of insurability is not required to convert or renew coverage.

Term insurance is categorized by all of the following, EXCEPT:

Term policies do not accrue cash value. They only provide death protection. The correct answer is: Policy cash value grows tax-deferred

What part of a mortgage reduction policy decreases over time?

A decreasing term policy (used for mortgage reduction insurance) has a decreasing face amount. The correct answer is: Face amount