Ch. 2 Quiz

Which of the following best describes a pure life annuity settlement option?

pure life provides payments for as long as the annuitant is alive

All of the following are true of an annuity owner EXCEPT

the owner must be the party to receive benefits

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

Annually renewable term policy with a cash value account

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

An agent selling variable annuities must be registered with

FINRA

In which of the following cases will be the insured be able to receive the full face amount from a whole life policy?

If the insured lives to age 100

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

It would not occur in a deferred annuity

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account

For variable products, underlying assets must be kept in

a separate account

Which of the following is NOT true regarding an annuity certain?

benefits stop at the annuitant's death

What characteristic makes whole life permanent protection?

coverage until death or age 100

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 type of premium do both universal life and variable universal life policies have?

flexible

During partial withdrawal from a universal life policy, which policy will be taxed?

interest

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

it has a guaranteed minimum interest rate

Which of the following is TRUE regarding the accumulation period of an annuity

it is a period during which the payments into the annuity grow tax deferred

Which of the following best describes annually renewable term insurance?

it is level term insurance

which of the following is NOT a type of whole life insurance?

level term

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

nothing, the payments will cease