Chapter 2 study questions
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following products will protect an individual from outliving their money?
Annuity
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
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
A Return of Premium term life policy is written as what type of term coverage?
Increasing
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest
Which of the following best describes annually renewable term insurance?
It is level term insurance
The form of life annuity which pays benefits throughout the lifetime of the annuitant and also guarantees payment for a minimum number of years is called
Life income with period certain
Which of the following is an example of a limited-pay life policy?
Life paid-up at age 65
Under a pure life annuity, an income is payable by the company
Only for the life of the annuitant
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
Which type of life insurance policy generates immediate cash value?
Single Premium
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
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
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend
Straight Life
Which of the following would help prevent a universal life policy from lapsing?
Target Premium
Which of the following best describes what the annuity period is?
The period of time during which accumulated money is converted into income payments
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
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal Life