Chapter 4*

D. Endowed contacts

An endowment life insurance policy is characterized by all of the following, EXCEPT: Select one: a. The death benefit is paid upon the death of the insured. b. The policy's face amount is paid out if the insured is alive at the contract maturity date. c. Policy cash value must equal the face amount by the end of the policy period. d. Endowment contracts endow only upon the insured's death. Endowment contracts mature on a particular date or when the insured reaches a certain age, such as 20 years from the date of purchase or until the insured reaches the age of 65. For this reason, the cash value in an endowment policy must accrue very quickly, demanding a significantly higher premium. The correct answer is: Endowment contracts endow only upon the insured's death.

Economic whole life

Question text A policy also referred to as enhanced ordinary life is: Select one: a. Modified whole life b. Economatic whole life c. Current assumption whole life d. Graded premium whole life LH63011 Feedback Your answer is correct Economatic whole life insurance, also referred to as Enhanced Ordinary Life or Extra Ordinary Life, combines a whole life policy with a term rider in which dividends are earned and used to buy paid-up coverage. The correct answer is: Economatic whole life

A. Family income policy

Question text A policy that has an income period beginning on the date of policy issuance is a: Select one: a. Family income policy b. Family maintenance policy c. Protection plan d. Juvenile Family income policies have an income period which begins the day that the policy is issued. The correct answer is: Family income policy

Cash value builds faster compared to straight life.

Question text All of the following statements describe modified whole life insurance, EXCEPT: Select one: a. Modified life is straight life with lower initial premiums during the policy's early years. b. Premiums increase after the policy's early years to a level that is slightly higher than straight life. c. Cash value builds faster compared to straight life. d. Modified whole life policies are often built with convertible term and whole life. LH63019 Feedback Your answer is correct Cash value in modified whole life policies builds slower compared to straight life policies.

C. creditor

The beneficiary of a credit life insurance policy is the: Select one: a. Insurer b. Insured c. Creditor d. Debtor Your answer is correct Credit life insurance is issued on the life of the person who has the debt (debtor) and the creditor owns and is the beneficiary of the policy.

Survivorship life policy

Upon the death of the last person insured, the _________ policy pays a death benefit. Select one: a. Survivorship life policy b. First-to-die c. Joint life d. Juvenile With a survivorship life policy, the policy proceeds are only paid upon the death of the last person insured. The correct answer is: Survivorship life policy

Premiums are lower in early years

What is the unique feature of modified life insurance? Select one: a. Premium paying period is shortened b. Premiums are lower in early years c. Face amount can be increased or decreased d. Face amount is level Modified life insurance is distinguished from other permanent life insurance policies because premiums are lower in early years to accommodate younger people who cannot afford the high cost of ordinary whole life insurance.

Decreasing term

What policy is usually used for credit life insurance? Select one: a. Whole life b. Straight life c. Increasing term d. Decreasing term Credit life insurance is usually issued as decreasing term life. As the debt is paid off, the face amount decreases to match the amount of the debt. The correct answer is: Decreasing term

Protection plane

Which policy combines whole life and convertible term? Select one: a. Family income policy b. Family maintenance policy c. Protection plan d. Juvenile policy LH63031 Feedback Your answer is correct The protection plan (family policy) insures the entire family. The primary breadwinner is insured with whole life, and the spouse and each child are insured with convertible term. The correct answer is: Protection plan

Family income policy

Which policy covers the primary breadwinner with both decreasing term insurance and whole life? Select one: a. Family maintenance policy b. Family income policy c. Juvenile policy d. Protection plan Your answer is correct Family income policies only insure the primary breadwinner. Coverage includes whole and decreasing term. The correct answer is: Family income policy