Life Insurance and Health Types of Life Policies
The equity in an equity index annuity is linked to
An index like Standard & Poors 500.
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first.
An Insurance policy that only required a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called
Single premium whole life.
Which of the following policies would be classified as a traditional level premium contract?
Straight life
All of the following entitles regulate variable life policies EXCEPT
The Guaranty Association
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
The policyowner of an adjustable life policy wants to increase the death benefit. which of the following statement is correct regarding this change?
The death benefit can be increased by providing evidence of insurability
All of the following are true of an annuity owner EXCEPT
The owner must be the party to receive benefits.
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
The equity in an index annuity is linked to
an index like the S&P 500
All other factors being equal, the least expensive first-year premium payment is found in
annually renewable term
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
beneficiary
Fixed annuities provide all of the following EXCEPT
hedge against inflation
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
immediate
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of renewal
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount
An agent selling variable annuities must be registered with
FINRA
A Lucky individual won the state lottery, so the sate will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
Why is an equity index annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate
Which of the following best describes annually renewable term insurance?
It is level term insurance
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
Your client wants both protection and savings from the insurance, and is willing to pay premium until retirement at age 65. What would be the right policy for this client
Limited pay whole life
Which option for Universal life allows the beneficiary to collect both the death and the cash value upon the death of the insured
Option B
Which of the following is NOT true regarding the annuitant
The annuitant cannot be the same person as the annuity owner.
Who bears all of the investment risk in a fixed annuity?
The insurance company
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
An insured purchased a 10-year level term policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
Which of the following determine s the cash value of a variable life policy?
The performance of the policy portfolio
Which of the following is TRUE for both equity indexed annuities and fixed annuities?
They have a guaranteed minimum interest rate.
Which of the following policies would have an IRS required corridor or gap between the cash value and death benefit?
Universal Life - Option A
All of the following are true regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion the death benefit of the permanent policy will be reduced by 50%.
All of he following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will e reduced by 50%
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interest rate.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Which statement in NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value
The main difference between immediate and deferred annuities is
when the income payments begin
An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died inn an automobile accident. How much will his wife receive from the policy?
$100,000
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-Pay Life
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
A universal Life Insurance policy is best described as a/an
annually renewable term policy with a cash value account
In an annuity, the accumulated money is covered into a stream of income during which time period?
Annuitization period
All other factors being equal the least expensive first-year premium is found in
Annually Renewable Term
Which of the following is called a "second-to-die" policy?
survivorship life
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
Which of the following products requires a securities license?
Variable annuity
When would a 20-pay whole life policy endow?
When the insured reaches age 100
The term "fixed" in a fixed annuity refers to all of the following EXCEPT
Death benefit
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 death benefit should one of them die
Joint Life
A married couple owns a permanent policy which covers both of their lives an pays a death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
An insured has a life insurance policy that requires him to pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay-life
Equity Indexed Annuities
Seek higher returns
Which of the following would help prevent a universal life policy from lapsing?
Target premium
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
The President of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statement is true?
The annuitant must be a natural person
All of the following statements about equity annuities are correct EXCEPT
The annuitant receives a fixed amount of return
The annuity owner dies while the annuity is still in accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
lower