Type of life policies quiz

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?

$50,000

All of the following could own group life insurance EXCEPT

A group needing low cost life insurance.

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

What are the two components of a universal policy?

Insurance and cash account

Which of the following is an example of a limited-pay life policy?

Life Paid-up at Age 65

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable universal life insurance

The LEAST expensive first-year premium is found in which of the following policies?

annually renewable term

What type of life insurance is most commonly used for group plans?

annually renewable term

In a group life insurance policy, the employer may select all of the following EXCEPT

beneficiary

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

convertible term policy

Which component increases in the increasing term insurance?

death benefit

What type of premium do both Universal Life and Variable Universal Life policies have?

flexible

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may

require evidence of insurability

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

5 years

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

Face amount

Which policy component decreases in decreasing term insurance?

Face amount

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and current

Annually renewable term policies provide a level death benefit for a premium that

Increases annually

The type of term insurance that provides increasing death benefits as the insured ages is called

Increasing Term

Variable Whole Life insurance is based on what type of premium?

Level fixed

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

SEC registration

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

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

To keep the policy in force

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first.

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value.

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

The full death benefit

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage.