Ch. 2 Life quiz

What is another name for interest-sensative whole life insurance?

current assumption life

an agent selling variable annuities must be registered with

FINRA

The insured is also the policy owner of a whole life policy. What age must the insured attain in order to receive the policys face amount?

100

Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money?

An annuity

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate.

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured which policy is that?

Joint life policy

Equity indexed annuities

Seek higher returns

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

To keep the policy in force

The minimum interest rate on an equity indexed annuity is often based on

an index like S&P 500

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

annually renewable term

Which of the following has the right to convert the existing term coverage to permanent insurance?

policyowner

All of the following are true of an annuity owner except

the owner must be the party to receive the benefits

What kind of policy allows withdrawls or partial surrenders?

universal life

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount

universal life

The main difference between immediate and deffered annuities is

when the income payments begin

the death protection component of universal life insurance is always

Annually Renewable Term

A Universal life insurance policy is best described as a/an

Annually Renewable term policy with a cash value account

in an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guarenteed

Fixed annuities provide all of the following except

Hedge against inflation

Which of the following is True regarding the annuity period?

It may last for the lifetime of the annuitant

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years, What will happen to the premium?

It will increase because the insured will be 5 years older than when the policy was originally purchased

which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

A man decided to purchase a $100,00 Annually Renewable Term Life Policy to provide additional protection untill his children finished college. He discovered that his policy

Required a premium increase each renewal.

The president of a company is starting annuity and decides that his corporation will be the annuitant. which of the following statements are true?

The annuitant must be a natural person.

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

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?

full death benefit

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

increases annually

What are the two components of a universal policy?

insurance and cash account

Suring partial withdrawal from a univeral life policy, which portion will be taxed?

interest

Which of the following is not true regarding the accumulation period of an annuity?

it would not occur in a deferred annuity

twin brothers are starting a new business. they know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. what type of insurance would be the most affordable and still provide a death benefit should one of them die?

joint life

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

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

life paid-up at age 65

The Policy owner of a univeral life policy may skip paying the premium and the policy will not lapse as long as

the policy contains sufficient cash value to cover the cost of insurance

Which of the following is TRUE for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate

The annuity owner dies while the annuity is still in the accumulation stage. which of the following is true?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

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?

The insured may renew the policy for another 10 years, but a higher premium rate

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy in force thoughout its lifetime.

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 type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Universal life

an insured owns a life insurance policy. to be able to pay some of her medical bills, she withdrawls a portion of the policys cash value. there is a limit for a withdrawl and the insurer charges a fee. what type of policy does the insured most likely have?

Universal life

All of the following are true regarding the convertibility option under a term life insurance policy except

decrease by 50%