Life Policies

Every five years the premium increases and when the policyowner stops paying coverage stops: a. variable b. term c. whole d. certain

b. term

Flexible adjustable life is another name for? a. whole life b. universal life c. term d. variable

b. universal life

Units, separate accounts, SEC, low risk tolerance, values vary, hedge against inflation.. terms used only with... a. term b. variable c. ordinary d. period certain

b. variable

What is the *penalty tax* imposed on amounts received from a *modified endowment* contract? a. 5% b. 8% c. 10% d. 12%

c. 10%

How many adjustments are made monthly to the cash account of universal life a. none b. 1 c. 2 d. 5

c. 2

If a person purchased a 10 year family maintenance policy and died five years after the policy was issued how long would the income period last? a. the family would be refunded premiums b. 5 years c. 6 months d. 10 years

d. 10 years

If a person purchased a 10 year family income policy and died five years after the policy was issued how long would the income period last? a. it would cancel b. 2 years c. 6 months d. 5 years

d. 5 years

Universal life policies have a structured premium payment schedule that must be followed during the entire contract period true or false

false (UL is the only type of policy that doesn't have a structured premium)

When future children are added to a family protection policy there is an additional premium due true or false

false (future children are automatically added)

Ordinary means individual term, whole life, endowments, flexible policies, and group term true or false

false (not individual term)

At what age does a juvenile policy *increase in face amount* and what is the usual amount of the increase?

21 or 25, 5x the original death benefit

Term insurance is typically characterized by low premiums and no cash true or false

true

Variable life is a fixed premium product sometimes called variable whole life and variable universal life is a flexible premium product true or false

true

the adjustments that an insurer makes in the cash account in a UL includes: Add the current prem paid, subtract mortality and expense charges, and add current interest true or false

true

SEC stands for

Securities and Exchange Commission

In order, what are the adjustments made monthly to the cash account of a universal life? _______________ and ____________________ a. credit/interest and deduct mortality/expenses b. deduct mortality/expenses and credit/interest c. taxes and interest d. interest and taxes

b.

Endowments endow or mature when? a. end of term b. age 100 c. 63 d. 65

b. 100

*Survivorship* life policy the face amount is paid out only upon the death of the first insured to die true or false

False

the 2 death benefit options available on universal life

I A level II B Increasing

In life insurance when a policy is renewable the renewal provision usually states that there will be an a. increase in premium b. increase in death benefit c. proof of insurability clause d. none of the above

a. increase in premium

*Renewable term* insurance can be described as a _____ death benefit with a(n) ______ premium a. level, increasing b. level, decreasing c. increasing, level d. decreasing, level

a. level, increasing

To extend coverage for another stated period of time without providing insurability is called a. renewable b. term c. period certain d. all of the above

a. renewable

A 20 year policy will mature at what age? a. end of 20 years b. age 100 c. age 65 d. age 63

b. age 100

Type of policy that would best fit a new home buyer's need to protect their *mortgage* is a. flexible term b. decreasing term c. renewable term d. universal life

b. decreasing term

When the guaranteed *cash value equals the original death benefit* a. whole life b. endowed c. variable term d. variable

b. endowed

A policy with an increasing death benefit with a *level premium* is: a. flexible term b. increasing term c. level term d. whole life

b. increasing term

Both the DOI and ________ are involved in regulating variables a. commissioner b. Securities exchange commission c. government d. NAIC

b. securities exchange commission

When the *policyowner can choose* the assets backing the *cash value* means they are choosing which ___________ their premium is being allocated to which backs their cash value. a. same account b. separate accounts c. cash accounts d. none of the above

b. separate accounts

A person with low income and *high insurance needs* should buy? a. whole life b. term c. flexible d. annuities

b. term

To exchange for a permanent policy without proof of insurability? a. surrender b. cash value c. convertible d. none of the above

c. convertible

A policy where the premium stays level and the face amount continues to decrease would be described as a a. decreasing period certain b. flexible term c. decreasing term d. variable term

c. decreasing term

The death of an insured creates a lump sum of money to be paid which means it creates an a. death benefit b. beneficiary c. immediate estate d. all of the above

c. immediate estate

With respect to variable life insurance who is assuming the investment risk of the separate accounts? a. insurer b. beneficiary c. policyowner d. applicant

c. policyowner

A policy which has a *level premium* that *increases* at each renewal is a __________________ a. increasing flexible term b. whole life c. renewable level term d. variable term

c. renewable level term

Arrange the following categories of life insurance from the leas to the most expensive: Endowments, flexibles, term and whole a. flexible, whole, endowments, term a. term, whole life, flexibles, endowments c. whole life, flexibles, term, endowments d. term, flexible, whole life, endowments

c. term, flexible, whole life, endowments

Which policy allows the *insured to choose* where the assets backing the cash value are *invested*? a. equity indexed b. flexible c. variable d. term

c. variable

Which policy pays the *face amount* if the insured *survives* to the *end of a certain period*? a. period certain b. term c. flexible term d. endowment

d. endowment

A policy that stays in force for a *specified period of time* with *level premiums* and *death benefit* would be: a. term b. variable c. whole d. level term

d. level term

Assets of a life insurers general account provide the backing for all life insurance products except: a. flexible term b. whole life c. annuities d. variable

d. variable

If Frank buys a 5 year term policy and Ernest purchases a whole life policy then Ernest's whole life policy will have a larger death benefit if he dies during the first 5 years true or false

false

Term insurance is level premium, initially the least expensive, and can be purchased on a paid up basis true or false

false

When a family policy covers children evidence of insurability is requires if coverage for children is permanent insurance true or false

false