Exam FX Types of Life Policies

Annuitant

When an annuity is written, whose life expectancy is taken into account?

Option A

Which Universal life option has a gradually increasing cash value and a level death benefit?

The recommended amount to keep the policy throughout its lifetime

Which of the following best defines target premium in a universal life policy?

Upon conversion, the death benefit of the permanent policy will be reduced by 50%

All of the following are True regarding the convertibility option under a term life insurance policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract.

All of the following are true regarding a decreasing term policy Except

Equity Indexed Annuity

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would like to purchase a(n)

$100,000

An individual purchased a $100,000 Joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

Joint Life

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

When the insured reaches age 100

When would a 20-pay whole life policy endow?

The annuitant assumes the risks on investment

Which of the following is TRUE regarding variable annuities?

Life Paid-up at Age 65

Which of the following is an example of a limited-pay life policy?

Survivorship life

Which of the following is called a "second-to-die" policy?

Whole Life policy

are reffered to as permanent protection, since as long as the premium is paid coverage will continue for the life of the insured. Both the premiums and death benefit are guaranteed and will remain level for life.

Under Option A

the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and death benefit before the policy matures.

Whole Life

Which of the following types of policies will provide permanent protection ?

Joint Life policy

covering two lives would be the least expensive because the premiums are based on an average age, and it would pay a death benefit only at the first death.

Universal Life

Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?

Interest

During partial withdrawal from a universal life policy, which portion will be taxed?

Equity Indexed Annuities

are tied to the Standard and Poor's Index.

The Annuitant

Receives payments from an annuity and is the person whose life expectancy is considered when writing the contract. The annuitant and annuity owner are often the same person but do not have to be.