Chapter 3 Xcel Solutions Chapter Part 1 Quiz Life Insurance Policies

What type of term life policy most likely contains a Renewability feature?

10 year convertible term

An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?

Key Person Insurance

What kind of premium does a Whole Life policy have?

Level

In order to sell a (n)____ Life policy, a producer is required to register with financial Industry Regulatory Authority (FINRA).

Variable

The insurance policy in which the cash values are determined by the performance of the underlying securities in the policy is called:

Variable Whole Life

What type of insurance offers permanent life coverage with premiums that are payable for life?

Whole Life

Under an interest sensitive whole life policy

cash values are determined by interest rates

A 15-year mortgage is best protected by what kind of life policy?

15-year decreasing term

Additional coverage can be added to a whole life insurance policy by adding a(n):

Decreasing term rider

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

Equity Index Insurance

T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?

Ten-year endowment

S owns a life insurance policy with cash values that fluctuate according to the underlying investment performance of common stocks. Which of these policies does S own?

Variable Whole life

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Variable life

with variable universal life, the policcyowner______

controls the investment of cash values and selects the timing and amount of premium payments

A variable insurance policy:

does not guarantee a return on its investment accounts

The amount of coverage on a group credit life policy is limited to

the insured's total loan value

At what point does a Whole Life Insurance policy endow(provide income)?

when the cash value equals the death benefit

A policy that becomes a Modified Endowment Contract (MEC)

will lose many of its tax advantages

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing Term policy

Which of these is an element of Variable Life Policy?

A fixed, level premium

What is true about a variable whole life policy?

A minimum guaranteed death benefit is provided

A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT

Change the policy's interest rate

The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy

Decreasing

Credit life insurance is typically issued with what type of coverage?

Decreasing Term

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

Decreasing Term

What information is NOT required to be included in a Whole Life policy?

Policy's guaranteed dividends table

Which is true concerning a Variable Universal Life policy?

Policyowner control where the investment will go and selects the amount of the premium payment

Which characteristics is consistent with a Straight Life policy?

Premiums are payable for as long as there is insurance coverage in force

What type of permanent life insurance policy offers the highest initial cash value?

Single Premium

K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs?

Straight Life