Chp4 Flexible Policies

Sandra wants to have flexibility with her life insurance policy to accommodate changes in her situation. She should consider:

Adjustable life

In a universal life insurance policy, the two most common adjustments made during a month are:

Cost of death protection deducted and current interest rate credited

Which policy works the same way as universal life, but has an interest rate that is tied to the stock market index?

Equity indexed universal life

Whole life and universal life policies have some similarities and differences. Which of the following is NOT a characteristic of a universal life policy?

Interest earned by the cash account cannot vary

Some universal policies permit a cash withdrawal. All of the following are true statements about universal life, EXCEPT:

It is treated as a loan.

If Sandra chooses an adjustable life policy, all of the following are flexible, EXCEPT:

No requirement for proof of insurability

What policy provides flexible premiums, cash values, face amounts, premium-paying period and length of coverage?

Term life

Which of the following best describes option B/option 2 under a universal life policy?

The death benefit is the policy face amount and the cash value.

Which of the following best describes option 1 under a universal life policy?

The death benefit is the policy face amount or policy cash value, but not both.

What policy can be described as annual renewable term with a cash value account?

Universal life

For what reason would the insurance company raise the death benefit of a universal life policy?

Prevent the cash value from growing too quickly

What happens when a universal life policyholder pays the target premium?

The policy will resemble whole life insurance.

All of the following statements are false regarding universal life insurance, EXCEPT:

Proof of insurability is required to increase the policy face amount.

What happens when a universal life policyholder pays the minimum premium?

The policy will resemble term life insurance.

All of the following are true regarding adjustable life policies, EXCEPT:

When the premium is decreased, the insured is not required to provide evidence of insurability.

Which of the following changes may the policyowner of an adjustable life policy NOT make?

Invest premiums in the insurer's separate account

The primary difference between universal life and adjustable life is:

Premium payments can be skipped.

A person who has a universal life policy and needs cash from the policy, but does not want to have an outstanding policy loan should:

Take a partial surrender of the policy's cash value

An adjustable life policy allows the policyowner to make all of the following changes, EXCEPT:

Invest premiums in a separate account

Which of the following best describes a circumstance in which the insurer would increase the death benefit of a universal life insurance policy?

To prevent the cash value from growing too quickly