C: Types of Life Policies
What can't happen regarding group insurance?
Participants in the policy each receive a policy.
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called...
Single Premium Whole Life
"Second-to-die" policy, AKA...?
Survivorship life
Which of the following best defines target premium in a universal life policy?
The recommended amount that keep the policy in force throughout its lifetime
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which policy will likely meet his needs?
Adjustable life
What type of life insurance is most commonly used for group plans?
Annually renewable term
What characteristics makes whole life permanent protection?
Coverage until death or age 100 (Whole Life policies are referred to as permanent protection, since as long as the premium is paid coverage will continue for the life of the insured or till the insured's age 10)
TRUE OR FALSE: Premiums are determined by the age, sex and occupation of each individual certificate holder
FALSE
If an employee wants to enter the group outside of the open enrollment period, to reduct adverse selection, the insurer may...
Require evidence of insurability
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan at least 5 years (If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.)
In a survivorship life policy, when does the insurer pay death benefit?
Upon the last death
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What would be classified as a traditional level premium contract?
straight life
Regarding credit life insurance, benefits are NOT PAID TO...
the borrow's beneficiary
Who can't own group life insurance?
A group needing low cost life insurance
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment
Regarding a $100,000 20 year level term policy, what DOESN'T HAPPEN?
At the end of 20 years, the policy's cash value will equal $100,000
Which policy component decreases in decreasing term insurance?
Face Amount
The type of term insurance that provides increasing death benefits as the insured ages is called...
Increasing term (Increasing term insurance provides an increase in the death benefit each year. The coverage is usually structured to provide a death benefit equal to the amount of premium paid on a permanent life insurance policy, or to provide a death benefit equal to the cash value accumulation in a permanent policy; however, it can be written as a stand-alone policy for the individual that has a need for increasing amounts of insurance.)
The premium of a survivorship life policy compared with that of a joint life policy would be...
LOWER
Variable Whole Life insurance is based on what type of premium?
Level fixed
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?
Level term
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life (Premium payments will cease at her age 65, but coverage will continue to her death or age 100)
An employee is insured under her employer's group life plan. If she terminates her group coverage, what CAN'T SHE DO
The insured cannot choose to convert to term or permanent individual coverage
The following are features of Indexed Universal life EXCEPT
Sale of this product requires a securities license. (Indexed Universal Life policies have name of the same features as the Universal Life: flexible premiums, adjustable death benefits, and an investment component. However, the policy's cash value is dependent upon the performance of the equity index. Sale of the Indexed Universal Life products does not require a securities license.)
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?
Limited-pay life
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases
