Chapter Exam 1 - Life Policies
J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
20-pay life
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 Pay Life
Which statement about a whole life policy is true
Cash value may be borrowed against
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
Which of the following features of a group term life policy enables an individual to leave the group and continue his or her insurance, without providing evidence of insurability
Conversion privilege
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing term
Which of these statements describe a modified endowment contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
Which of these needs is satisfied by Adjustable Life insurance?
Insured's need for flexible premiums
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
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
Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of these policies should Q purchase?
Term life
What type of life insurance gives the greatest amount of coverage for a limited period of time
Term life
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
Variable Life
A(n) life policy combines investment choices with a form of term coverage
Variable Universal
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
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)
Variable universal life policy
At what point does a whole life insurance policy endow
When the cash value equals the death benefit
When is the face amount of a Whole Life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
conversion
The Combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy
decreasing
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider
A variable insurance policy
does not guarantee a return on its investment accounts
A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, cost of insurance, and the
expense charges
Variable Life products require a producer to
hold a Life Insurance license and a Securities license
What type of life insurance are credit policies issued as?
term
When is the face amount paid under a Joint Life and Survivor policy?
upon death of the last insured
A life insurance policy that provides a policyowner with cash value along with a level face amount is called
whole life
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100
whole life
What type of insurance offers permanent life coverage with premiums that are payable for life?
whole life
A policy that becomes a Modified Endowment Contract (MEC)
will lose many of its tax advantages