Chapter 4 Life Insurance quiz
Which of the following statements are NOT true regarding annual renewable term (ART) policies:
ART is guaranteed renewable on an annual basis with proof of insurability.
All of the following term life insurance policies have level premiums, EXCEPT: Select one: a. Level b. Decreasing c. Increasing
Annual renewable term
Which of the following are characteristics of term insurance:
Cash value
Which of the following life insurance policies is most appropriate for mortgage protection?
Decreasing term
What part of a mortgage reduction policy decreases over time?
Face amount
___________ policies have premiums that fluctuate between the current rate and maximum rate, as stated in the policy.
Indeterminate premium
Which type of life insurance provides pure death protection?
Term
Which of the following is not a characteristic of decreasing term life insurance?
The premium decreases to zero by the end of the policy period.
Which life insurance policy has annual increasing premiums and does not build cash value?
annual renewal term
Which type of life insurance coverage is used to provide mortgage protection?
Decreasing term
Which of the following policies has a level face amount with level premiums?
Level Premium Term
Which term policy has level premiums and a level face amount?
Level premium term
All of the following are drawbacks of term life insurance, EXCEPT:Select one: a. Term insurance can be increasingly expensive. b. Each time a term life insurance policy is renewed, the premium increases. d. If term insurance must be discarded due to expense or the insured has surpassed the maximum age limit, then the insured may be left without any life insurance protection when it is needed most
Living benefits are available to the policyholder in the form of cash accrual.
Which of the following is NOT categorized by Term Insurance
Policy cash value grows tax-deferred
Which of the following does NOT characterize term life insurance
Term life insurance provides living benefits (cash accrual).
Which of the following characteristics does not describe convertible term life insurance policies?
The attained age is the insured's age upon purchase of the term life insurance policy.
convertible term policies,
The converted policy's premiums will be based on the insured's attained or original age.
Blake just bought a home and needs insurance to cover his mortgage. He does not have a lot of money to spend on this coverage. What policy would you recommend to Blake?
decreasing term
Mortgage protection insurance uses what type of life insurance coverage?
decreasing term
Term life insurance provides ________________. Whole life insurance provides _______________.
pure death protection;death benefits and living benefits
What are the two major types of life insurance?
Term and Whole
Pure death protection only is provided by which life insurance policy?
term life insurance
Wesley purchases an increasing term life insurance policy. Which of the following elements must increase in Wesley's policy?
the death benefit
Which term policy has increasing premiums and a level face amount?
Annual renewable term
Which of the following policies is most appropriate for a 23-year old who wants a year of life insurance protection before getting married?
Interim term
Kara is interested in purchasing a life insurance policy that has steady premiums. She doesn't want to pay higher premiums when she is older. What policy should you not recommend to her?
Renewable and convertible term
All of the following statements regarding renewable term life insurance policies are false, EXCEPT: a. Renewable term life insurance policies can only be renewed by the insurance company, and the insured must provide evidence of insurability. b. Renewable term life insurance policies are always convertible. c. Renewable term life insurance policies may be renewed by the insured as long as evidence of insurability is provided.
Renewable term life insurance policies are renewable at the insured's option.
Sheldon wants a life insurance policy with premiums that do not increase over time. Which of the following policies would you not recommend to him?
convertible term
What are the benefits of a convertible and renewable term life insurance policy?
Proof of insurability is not required to convert or renew coverage.
Which of the following policies allows a policyowner to renew a term policy and receive a lower premium by providing proof of insurability?
Reentry term
