LIFE INSURANCE POLICIES
Which of the following is called "second-to-die" policy?
Survivorship life
All of the following could own group life insurance EXCEPT
A group needing low-cost life Insurance.
Annually renewable term policies provide a level death benefit for a premium that
Increases annually.
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing term.
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
Which component increases in the increasing term insurance?
Death benefit
An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Attained age
Which type of life insurance policy generates immediate cash value?
Single Premlum
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
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
Which of the following is TRUE about credit life insurance?
Creditor is the policyowner.
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 policies would be classified as a traditional level premium contract?
Straight Life
Which of the following are generally NOT considered when underwriting group insurance?
The insureds' medical history
A Straight Life policy has what type of premium?
A level annual premium for the life of the Insured
Which of the following statements about life is group correct?
The cost of coverage is based on the ratio of men and women in the group.
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal life
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current.
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value the upon death of the insured?
Option B
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 100 is called age
Single premium whole life.
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer willl pay the full death benefit from the group pollicy to the beneficiary.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance.
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?
Joint Life
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
The type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called
Credit life.
What are the two components of a universal policy?
Insurance and cash account
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal.
Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
Juvenile Life is classified as any life insurance purchased by a minor.
A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?
The purpose of the group was to purchase lite insurance.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benetit can be increased by providing evidence of insurability.
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment.
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
When an employee terminates coverage under a group insurance policy, coverage continues in force
For 31 days
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases.
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration.
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The Insured may choose to convert to term or permanent individual coverage.
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
An individual has just 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
Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
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 100 is called
Single premium whole life.
:Which of the following is TRUE about credit life insurance?
Creditor is the policyowner.
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
Adjustable Life
Which policy component decreases in decreasing term insurance?
Face amount
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
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
The premium of a survivorship life policy compared with that of a joint life policy would be
Lower.
Which of the following best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
In a group life insurance policy, the employer may select all of the following EXCEPT
The beneficiary.
The death protection component of Universal Life Insurance is always
Annually Renewable Term
All other factors being equal, the least expensive first-year premium payment is found in
Annually Renewable Term.
All of the following statements are correct regarding credit life insurance EXCEPT
Benefits are paid to the borrower's beneficiary.
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased.
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Both Universal Life and Varlable Universal Life have a
Flexible premium.
Which of the following would be the beneficiary in credit life insurance?
Creditor
Which of the following is TRUE regarding the insurance amount in a credit life policy?
The creditor can only insure the debtor for the amount owed.
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.
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
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
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
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
Which of the following would help prevent a universal life policy from lapsing?
Target premium
An Adjustable Life policyowner can change which of the following policy features?
The coverage period
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirement to prove insurability on the part of the participants.
Which of the following best describes annually renewable term insurance?
It is level term Insurance.
Which of the following best describes annually renewable term insurance?
It is level term insurance.
Which of the following is correct regarding credit life insurance?
It insures the life of a debtor