Chapter 3: Life Insurance Policies - Snapshot Questions

What are some of the group characteristics that are important for underwriting?

Purpose of group Size of group turnover and financial strength of the group

How does continuous premium straight life differ from 20-year limited pay life?

The premiums for straight life will be spread over the insured's lifetime, thus enabling the insurance company to charge a lower annual premium. When the premium-paying period is condensed to 20 years, a higher annual premium is required.

What is annually renewable term (ART) insurance?

The purest form of term insurance in which the death benefits remains level; the policy may be guaranteed renewable each year without proof of insurability, but the premium increases annually according to the attained age.

Who is the owner and who is the beneficiary of a credit life policy?

the creditor is the owner and the beneficiary of the policy.

Which authorities regulate variable life policies?

dually regulated by the state and federal government: Securities and Exchange Commission (SEC) Financial Industry Regulatory Authority (FINRA) and the State Department of INsurance

What are the characteristics of whole life insurance?

permanent protection to the insured's age 100, with living benefits such as cash value, policy loans, and nonforfeiture options.

Which features of an adjustable life policy can be changed by the policy owner?

the premium or the premium-paying period the face amount period of protection

What are the death benefit options in universal live policies?

Option A: the level death benefit option Option B: the increasing death benefit option

Who owns a group life contract? What does the insured receive?

The actual policy (Master policy/contract) is issued to the sponsor of the group which is often an employer the employees are the insured who are issued certificates of insurance

What is the limit on the amount of credit life insurance on a debtor?

cannot exceed the amount owed to the creditor

What are the characteristics of term life insurance?

It provides temporary, pure death protection, with no cash value.