Life Insurance

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All of the following could own group life insurance EXCEPT

A group needing low-cost life insurance.

For variable products, underlying assets must be kept in

A separate account

A Universal Life Insurance policy is best described as a/an

Annually Renewable Term policy with a cash value account

An employee quote his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

Attained age

Term life - Decreasing Term

Coverage decreases at predetermined times gradually; best used when the need for protection declines from year to year

What characteristics makes whole life permanent protection?

Coverage until death or age 100

Which component increases in the increasing term insurance?

Death benefit

An individual has borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

What does "level" refer to in level term insurance!

Face amount

Which of the following is correct regarding credit life insurance?

It insures the life of a debtor

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Jumping juvenile policy

Term Life - Level Premium Term

Level death benefit and level premium

Whole Life - Limited Payment

Premiums are paid until a certain age or time; coverage in effect to age 100

Whole Life - Single Payment

Premiums paid in one lump sum and coverage continues to age 100

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 10 is called

Single premium whole life

An employee is insured under her employer's group life plan. If she terminated her group coverage, which of the following statements is INCORRECT?

The insured may choose to covert term to permanent individual coverage

Which of the following statements is correct regarding a whole life policy?

The policyowner is entitled to policy loans

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Variable

Whole Life - Straight Life (Continuous Premium)

• Basic policy • Level death benefit • Insured pays premiums for life or until age 100

Other Types of Policies - Varibale Life

• Fixed premium, minimum death benefit • Cash value and the actual amount of death benefit are not guaranteed • Assets in separate accounts • Agents must be dually licensed in insurance and in securities

Flexible Premium - Universal Life

• Has an insurance component in the form of annually renewable term • 2 death benefit options: Option A - level death benefit, Option B - increasing death benefit • Can make partial surrender/cash withdrawal • Flexibility through unbinding (separating)

Other Types of Policies - Group Life

• Master Contract goes to the sponsor, usually employer • Certificate of Insurance goes to member • Underwritten as a group • If coverage after open enrollment-proof of insurability is required • Conversion to individual policy in 31 days - same face amount but higher premiums due to attained age

Whole Life - General Characteristics

• Permanent protection • Guaranteed elements (face amount, premium, and cash value) until death or age 100 • Level premium • Cash value and other living benefits

Flexible premium - Adjustable Life

• Policyowner may adjust the premium and premium-paying period, the face amount, and the period of protection • Can be converted from term to whole life and vice versa • Cash value only develops if the premiums paid are more than the cost of the policy

Term Life - General Characteristics

• Pure protection • Lasts for specifc term • No cash value

Term Life - Annually Renewable Term

• Renews each year without proof of insurability • Premiums increases due to attained age

Flexible Premium - General Characteristics

• Type of whole life insurance • Flexible premium


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