Ch 2
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
In which of the following cases will the insured be able to receive the full face amount from a whole life policy?
If the insured lives to age 100
Annually renewable term policies provide a level death benefit for a premium that
Increases annually
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
What is the purpose of establishing the target premium for a universal life policy?
To keep the policy in force
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
Which of the following products requires a securities license?
Variable annuity
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit
The minimum interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500
Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?
An annuity
Which of the following is INCORRECT regarding a $100,000 20-year level term policy?
At the end of 20 years, the policy's cash value will equal $100,000.
Which of the following is a feature of a variable annuity?
Benefit payment amounts are not guaranteed
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
Which of the following is another term for the accumulation period of an annuity?
Pay in period
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
Which type of life insurance policy generates immediate cash value?
Single Premium
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment
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?
The annuitant must be a natural person.
All of the following are true regarding a decreasing term policy EXCEPT
the payable premium amount steadily declines throughout the duration of the contract
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
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
