NC life and health insurance study questions
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? AThe insured's premiums will be waived until she is 21. BThe premiums will become tax deductible until the insured's 18th birthday. CSince it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. DThe insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.
A
All of the following statements are true regarding mortgage protection insurance EXCEPT AThe face amount remains the same throughout the life of the policy. BIt is used to pay off the balance on the mortgage. CThe face amount decreases as the amount owed on the mortgage decreases. DIt's a decreasing term insurance.
A
All other factors being equal, which of the following types of annuities will generally provide the highest monthly income? AStraight Life BJoint and Survivor CInstallment Refund DLife with a 10-year Period Certain
A
If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is AFully insured. BPartially insured. CCorrectly insured. DPermanently insured
A
An insured committed suicide one year after his life insurance policy was issued. The insurer will APay nothing. BRefund the premiums paid. CPay the policy's cash value. DPay the full death benefit to the beneficiary.
B
If an annuitant dies before annuitization occurs, what will the beneficiary receive? ACash value of the plan BEither the amount paid into the plan or the cash value of the plan, whichever is the greater amount CEither the amount paid into the plan or the cash value of the plan, whichever is the lesser amount DAmount paid into the plan
B
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy? APremature death BReturn of premium CCost of living DDecreasing term
B
Who has the legal title of the property in a trust? AGuardian BTrustee CGrantor DBeneficiary
B
During partial withdrawal from a universal life policy, which portion will be taxed? ALoan BInterest CCash value DPrincipal
B During the withdrawal, the interest earned on the withdrawn cash value may be subject to taxation.
What do Modified Life and Straight Life policies have in common? AGraded premium BTemporary protection CAccumulation of cash value DSame amount of premium
C
Which nonforfeiture option has the highest amount of insurance protection? ADecreasing Term BReduced Paid-up CExtended Term DConversion
C
Which of the following is TRUE for both equity indexed annuities and fixed annuities? ABoth are considered to be more risky than variable annuities. BThey invest on a conservative basis. CThey have a guaranteed minimum interest rate. DThey are both tied to an equity index.
C
Which of the following is an example of a limited-pay life policy? ALevel Term Life BStraight Life CLife Paid-up at Age 65 DRenewable Term to Age 70
C Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.
In Modified Life policies, what happens to the premium? AIt is higher during the first policy years. BIt varies at the beginning, but levels out by the end of the third year. CIt is level at the beginning and increases after the first few years. DIt always remains level.
C Modified Life policies charge lower premiums (similar to term rates) during the first few policy years, usually the first 3 to 5 years, and then higher level premiums for the remainder of the insured's life. The higher subsequent premiums are typically higher than straight life premiums would be for the same age and amount of coverage.
Which of the following policies would be classified as a traditional level premium contract? AUniversal Life BVariable Universal Life CStraight Life DAdjustable Life
C Straight whole life policies have a level guaranteed face amount and a level premium for the life of the insured.
Which of the following is NOT a characteristic of universal life insurance? A Flexible death benefit B Cash account C Fixed premium D Unbundled premium
C Universal life policies allow the policy owner to increase the amount of premium going into the policy and to later decrease it again. They may even skip a premium payment. The rest of the features apply to universal life policies.
Both Universal Life and Variable Universal Life have a ADecreasing premium. BIncreasing premium. CFlexible premium. DLevel fixed premium.
C Variable universal life, like universal life itself, has a flexible premium that can be increased or decreased as the policyowner chooses, so long as there is enough value in the policy to fund the death benefit.
Which of the following products requires a securities license? AFixed annuity BEquity Indexed annuity CDeferred annuity DVariable annuity
D
Which of the following best defines target premium in a universal life policy? AThe maximum amount the policyowner may pay on a policy BThe minimum amount to make sure the policy is annually renewable CThe corridor of insurance DThe recommended amount to keep the policy in force throughout its lifetime
D The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the AOther-insured rider. BChange of insured rider. CJuvenile rider. DPayor rider.
A
All of the following statements are true regarding installments for a fixed amount EXCEPT AThe payments will stop when the annuitant dies. BValue of the account and future earnings will determine the time period for the benefits. CThis option pays specific amount until the funds are exhausted. DThe annuitant may select how big the payments will be.
A
All of the following would be eligible to establish a Keogh retirement plan EXCEPT AThe president and employee of a family corporation. BA sole proprietor of a service station who employs four employees. CA sole proprietor of film development store with no employees. DA hair dresser who operates her business at her house.
A
An insured receives an annual life insurance dividend check. What term best describes this arrangement? ACash option BReduction of Premium CAnnual Dividend Provision DAccumulation at Interest
A
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a AJoint life annuity. BJoint and survivor annuity. CDeferred annuity. DPure annuity.
A
The two types of assignments are AAbsolute and collateral. BAbsolute and partial. CComplete and partial. DComplete and proportionate.
A
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called AJoint and survivor. BFixed period. CFixed amount. DJoint life.
A
When an annuity is written, whose life expectancy is taken into account? AAnnuitant BBeneficiary CLife expectancy is not a factor when writing an annuity. DOwner
A
Which is true about a spouse term rider? AThe rider is usually level term insurance. BCoverage is allowed for an unlimited time. CThe rider is decreasing term insurance. DCoverage is allowed up to age 75.
A
Which of the following is NOT true about a group annuity? AIt can be owned by individual employees. BIt can be noncontributory. CIt can be qualified. DIt can be tax deferred.
A
Which of the following is NOT true regarding the accumulation period of an annuity? AIt would not occur in a deferred annuity. BIt is the period during which the annuity payments earn interest. CIt is the period over which the annuitant makes payments into an annuity. DIt is also known as the pay-in period.
A
Which of the following is another term for the accumulation period of an annuity? APay-in period BPremium period CLiquidation period DAnnuity period
A
Which of the following will NOT be an appropriate use of a deferred annuity? ACreating an estate BAccumulating retirement funds CAccumulating funds in an IRA DFunding a child's college education
A
Your client's employer does not offer a company-wide annuity contract. What type of annuity contract could your client obtain? AIndividual BIndependent Group Contract CSingle DNonqualified
A
Which of the following best describes annually renewable term insurance? AIt is level term insurance. BIt requires proof of insurability at each renewal. CNeither the premium nor the death benefit is affected by the insured's age. DIt provides an annually increasing death benefit.
A Annually renewable term is a form of level term insurance that offers the most insurance at the lowest cost.
All other factors being equal, the least expensive first-year premium payment is found in AAnnually Renewable Term. BIncreasing Term. CDecreasing Term. DLevel Term.
A Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? AThe insured's premiums will be waived until she is 21. BThe premiums will become tax deductible until the insured's 18th birthday. CSince it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. DThe insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.
A If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.
Concerning Juvenile Life insurance, which of the following statements is INCORRECT? AJuvenile Life is classified as any life insurance purchased by a minor. BUsually a parent or guardian is the applicant for insurance on the life of a minor. CIt can be a limited premium payment policy. DJuvenile Life is classified as any life insurance written on the life of a minor.
A Juvenile Life insures the life of a minor. It does not need to be purchased by a minor.
All of the following are true regarding a decreasing term policy EXCEPT AThe payable premium amount steadily declines throughout the duration of the contract. BIt has a lower premium than level term. CThe contract pays only in the event of death during the term and there is no cash value. DThe face amount steadily declines throughout the duration of the contract.
A Premiums remain level with a decreasing term policy; only the face amount decreases.
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium? AUniversal life BVariable life CDecreasing term DStraight whole life
A The policyowner has the flexibility to increase the amount of premium going into the policy and to later decrease it again. In fact, the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to compensate for the nonpayment of premium.
A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? AThe surrender value will not be more than 80% of the cash value in the annuity at the time of surrender. BThe surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges. CA deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. DThe surrender value will be based on current interest rates.
B
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT AThe policyholder has the right to withdraw the accumulations at any time. BThe interest credited under this option is not taxable since it remains inside the insurance policy. CThe annual dividend is retained by the company. DThe interest is credited at a rate specified by the policy
B
In a direct rollover, how is the money transferred from one plan to the new one? AFrom the original plan to the original custodian BFrom trustee to trustee CFrom trustee to the participant DFrom the participant to the new plan
B
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be ADiscounted. BAdjusted to the insured's age at the time of renewal. CDetermined by the health of the insured. DBased on the issue age of the insured
B
Naming a "trust" as the beneficiary of a life insurance policy can accomplish all of the following for the policyowner, EXCEPT AReceive death benefits on behalf of beneficiaries who are minor children. BAllow the trustee to transfer the assets of the trust to their personal account. CEstablish an account to fund the insured's children's education. DGive the policyowner flexibility in disbursing the proceeds of a death benefit.
B
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT AFace amount of the policy. BThe insured's age at death. CThe beneficiary's life expectancy. DProjected interest rates.
B
The interest earned on policy dividends is A40% taxable, similar to a capital gain. BTaxable. CNontaxable. DTax deductible.
B
The minimum number of credits required for partially insured status for Social Security disability benefits is A4 credits. B6 credits. C10 credits. D40 credits.
B
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true? AThe contract can be issued without an annuitant. BThe annuitant must be a natural person. CA corporation can be an annuitant as long as it is also the owner. DA corporation can be an annuitant as long as the beneficiary is a natural person.
B
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? ANonforfeiture Clause BCommon Disaster Clause CSpendthrift Clause DSettlement Clause
B
What kind of policy allows withdrawals or partial surrenders? AVariable whole life BUniversal life C20-pay life DTerm policy
B
What type of insurance would be used for a Return of Premium rider? AAnnually Renewable Term BIncreasing Term CLevel Term DDecreasing Term
B
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount AThe same as the original policy minus the cash value. BEqual to the original policy for as long a period of time that the cash values will purchase. CIn lesser amounts for the remaining policy term of age 100. DEqual to the cash value surrendered from the policy.
B
Which of the following best describes what the annuity period is? AThe period of time from the effective date of the contract to the date of its termination BThe period of time during which accumulated money is converted into income payments CThe period of time from the accumulation period to the annuitization period DThe period of time during which money is accumulated in an annuity
B
Which of the following is TRUE about nonforfeiture values? APolicyowners do not have the authority to decide how to exercise nonforfeiture values. BThey are required by state law to be included in the policy. CThey are optional provisions. DA table showing nonforfeiture values for the next 10 years must be included in the policy.
B
Which of the following riders would NOT cause the Death Benefit to increase? AAccidental Death Rider BPayor Benefit Rider CGuaranteed Insurability Rider DCost of Living Rider
B
W owns a policy in which she is covered as the bread-winner with permanent insurance and with decreasing term insurance in the form of a rider. What type of policy is this? AFamily Protection Policy BFamily Income Policy CFamily Policy DFamily Maintenance Policy
B If the insured dies during the income period of a family income policy, monthly benefits are paid to the survivors for the balance of the income phase. The death benefit is then paid to the beneficiary. During the income phase, the insurer retains the cash value and death benefit to invest and generate interest.
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? AGraded Premium Life BLimited-pay Life CVariable Life DAdjustable Life
B In limited-pay policies, the premiums for coverage will be completely paid-up well before age 100, usually after a specified number of years.
A 20-year family income policy was purchased effective April 1, 2001. The insured died four months later, on August 1, 2001. The beneficiary receives monthly income for A10 years. B19 years and 8 months. C9 years and 8 months. D20 years.
B Monthly benefits paid for the remainder of the 20 year benefit period.
In a survivorship life policy, when does the insurer pay the death benefit? AIf the insured survives to age 100 BUpon the last death CUpon the first death DHalf at the first death, and half at the second death
B Survivorship life pays on the last death rather than upon the first death.
Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources? AVariable life BTerm CWhole Life DAnnuity
B Term insurance provides a death benefit only; cost per $1,000 of coverage is less than other types of policies that create cash values. Review Content
Which of the following would help prevent a universal life policy from lapsing? A Corridor of insurance B Target premium C Face amount D Adjustable premium
B The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
All of the following are true about variable products EXCEPT AThe cash value is not guaranteed. BPolicyowners bear the investment risk. CThe premiums are invested in the insurer's general account. DThe minimum death benefit is guaranteed.
C
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? AFlexible premium BImmediate CDeferred DFixed
C
If the owner prematurely surrenders his deferred annuity before the annuitization period begins, which of the following is most likely to occur? AA surrender charge will not be imposed because the account has been open for at least 1 year. BThe owner will forfeit any premiums he has paid into the account, but will receive any interest earned on the account. CThe owner will receive the premium payments that have been paid into the annuity, plus any interest, minus a surrender charge. DA surrender charge will be imposed that is equal to 3 of the owner's monthly annuity payments.
C
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? APaid-up options BExtended term CCash surrender DReduced paid-up
C
What is the purpose of a conditional receipt? AIt serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company. BIt is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue. CIt is intended to provide coverage on a date earlier than the date of the issuance of the policy. DIt guarantees the applicant that a policy will be issued in the amount applied for in the application.
C
What would be an advantage to naming a contingent (or secondary) beneficiary in a life insurance policy? AIt ensures the policy proceeds will be split between the primary and contingent beneficiaries. BIt requires that someone who is not the primary beneficiary handles the estate. CIt determines who receives policy benefits if the primary beneficiary is deceased. DIt allows creditors to receive payment out of the proceeds.
C
Which component increases in the increasing term insurance? AInterest on the proceeds BPremium CDeath benefit DCash value
C
Which of the following best describes a pure life annuity settlement option? ABenefits are paid for a fixed period of time, specified when the policy begins to pay. BPure life provides payments for as long as both the annuitant and the spouse are living. CPure life provides payments for as long as the annuitant is alive. DPure life guarantees that all the proceeds will be paid out.
C
Which of the following is true of a children's rider added to an insured's permanent life insurance policy? AThe policy covers only the natural children of the insured. BEach child covered must show evidence of insurability. CIt is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age. DIt is permanent insurance.
C
Which of the following statements about a suicide clause in a life insurance policy is TRUE? ASuicide is covered as long as the policy is in force. BSuicide is excluded as long as the policy is in force. CSuicide is excluded for a specific period of years and covered thereafter. DSuicide is covered for a specific period of years and excluded thereafter.
C
A policy will pay the death benefit 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? AOrdinary life policy BLimited pay whole life CLevel term DTerm to specified age
C A 20-year term policy is written to provide a level death benefit for 20 years.
B just bought a new car, which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B? ALimited Pay BInterest-sensitive Whole Life CModified Life DLimited Term
C A Modified Life policy would be best. It charges a lower premium for the first few policy years and then a higher level premium for the remainder of the life of the policy. These policies were developed to make the purchase of whole life insurance more attractive for individuals who have limited financial resources but will be able to afford higher premiums in the near future.
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium? AIf the daughter is disabled for more than 3 months BIf the daughter is disabled for any length of time CIf the father is disabled for more than 6 months DIf the father is disabled for at least a year
C Payor benefit only pays if the owner, the father in this example, is disabled for at least 6 months.
A Universal Life insurance policy has two types of interest rate that are called AFixed and Variable BMinimum and Target CGuaranteed and Current DOption A and Option B
C The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs the cash value with a contract (lower guaranteed) rate of interest.
What is the purpose of establishing the target premium for a universal life policy? ATo pay up the policy faster BTo cover all policy expenses CTo keep the policy in force DTo accumulate cash value faster
C The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
An insured committed suicide one year after his life insurance policy was issued. The insurer will APay the policy's cash value. BPay the full death benefit to the beneficiary. CPay nothing. DRefund the premiums paid.
D
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? AThe policy will be interpreted as if the insured did not have an answer to the question. BThe policy will be void. CThe insurer may deny coverage later, because of the information missing on the application. DThe policy will be interpreted as if the insurer waived its right to have an answer on the application.
D
In an annuity, the accumulated money is converted into a stream of income during which time period? APayment period BAmortization period CConversion period DAnnuitization period
D
In order to qualify for conversion from a group life policy to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? A10 B1 C3 D5
D
The annuity owner dies during the accumulation period of his annuity. The cash value of his annuity exceeds the premiums he paid. There is no named beneficiary. Which of the following is true? AThe premium value will be paid to the annuitant's estate. BThe state government will receive the amount of premiums paid. CThe state government will receive the cash value of the annuity. DThe cash value will be paid to the annuitant's estate.
D
The premiums paid by the employer in a business life insurance policy are ATax deductible by the employee. BAlways taxable to the employee. CNever taxable to the employee. DTax deductible by the employer.
D
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called AGuaranteed insurability. BWaiver of cost of insurance. CPayor benefit. DWaiver of premium.
D
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? AInstallments for a fixed amount BInstallment refund CCash refund DInstallments for a fixed period
D
What is the waiting period on a Waiver of Premium rider in life insurance policies? A30 days B3 months C5 months D6 months
D
Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy? AThe Entire Contract Provision BThe Consideration Clause CAssignment Rights DOwner's Rights
D
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? AAnnuitization period BPay-out period CLiquidation period DDepreciation period
D
Which of the following is NOT allowed in credit life insurance? ACreditor having a collateral assignment on the policy BCreditor requiring that a debtor has a life insurance CCreditor becoming a policy beneficiary. DCreditor requiring that a debtor buys insurance from a certain insurer
D
Which of the following is NOT true regarding the annuitant? AThe annuitant's life expectancy is taken into consideration for the annuity. BThe annuitant receives the annuity benefits. CThe annuitant must be a natural person. DThe annuitant cannot be the same person as the annuity owner.
D
Which of the following is TRUE regarding the accumulation period of an annuity? AIt is also referred to as the annuity period. BIt is a period of time during which the beneficiary receives income CIt is limited to 10 years. DIt is a period during which the payments into the annuity grow tax deferred.
D
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity? AInvestment performance of the company BInvestment performance of the insured CStatewide predetermined annual interest rate DInsurer's guaranteed minimum rate of interest
D
Who can request changes in premium payments, face value, loans, and policy plans? AContingent beneficiary BBeneficiary CProducer DPolicyowner
D
Who is the owner and who is the beneficiary on a Key Person Life Insurance policy? AThe employer is the owner and the key employee is the beneficiary. BThe key employee is the owner and beneficiary. CThe key employee is the owner and the employer is the beneficiary. DThe employer is the owner and beneficiary.
D
What are the two components of a universal policy? AInsurance and investments BMortality cost and interest CSeparate account and policy loans DInsurance and cash account
D A universal policy has two components: an insurance component and a cash account. The insurance component of a universal life policy is always annual renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or the current rate, whichever is higher.
Which policy component decreases in decreasing term insurance? ACash value BDividend CPremium DFace amount
D Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term.
When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy? AThey can convert their coverage to permanent life insurance with evidence of insurability. BFamily members are not provided any rights. CThey can surrender the coverage for its cash value. DThey can convert their coverage to permanent life insurance without evidence of insurability.
D Family members may convert their term coverage to permanent insurance if requested within the time stated in the policy.
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? AJumping Juvenile BJuvenile Premium Provision CWaiver of Premium DPayor Benefit
D If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.
What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy? AIndexed life BIndeterminate premium CEnhanced life DModified life
D Modified life policies were developed to attract young professionals who have a large financial investment in their education and training, but starting their professional careers, they have limited resources to buy insurance. Modified life is a permanent policy, but in the early years, the premiums are similar to that of a term policy; in later years, the premiums are increased to build cash values and cause the policy to endow.
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? AThe insured must provide evidence of insurability to renew the policy. BThe insured may only convert the policy to another term policy. CThe insured may renew the policy for another 10 years at the same premium rate. DThe insured may renew the policy for another 10 years, but at a higher premium rate.
D Policies that are guaranteed renewable and convertible may be renewed, without evidence of insurability, for another like term, or may be converted to permanent insurance, without evidence of insurability.
Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years. After the period of increase the premiums will AContinue to increase. BReturn to the initial premium amount. CDecrease again. DBe level thereafter.
D When a Graded-Premium Whole Life policy begins, the premium amounts are typically 50% lower than premiums for straight life policies. The premium then gradually increases each year for a period of usually 5 or 10 years and then remains level thereafter.