Life Insurance Policies
The premium remains level
In term what happens to the premium throughout the term of the policy
Cash value and death benefit
In variable universal life insurance, to what policy component does the term variable refer
Universal Life
In what type of life insurance polices can the policy owner skip premium payments without the policy lapsing
Limited pay whole life
A whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy
Decreasing term
An individual has just borrowed 10,00 on a 5 year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation
Variable
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
Universal life
Between adjustable life and universal life policies, which on provides more flexibility to the policy owner
Accumulate
Build up
Variable life insurance products
Contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance
Fixed life insurance products
Contracts that offer guaranteed minimum or fixed benefits
Decreasing term
What type of life insurance is best suited to cover a mortgage
Limited Pay Whole life
What type of life insurance policy is life paid-up at age 65
Term
What type of life insurance policy offers pure death protection
Whole life
What type of life insurance policy provides permanent protection
Group policy
What type of policy is typically issued without proof of insurability from the insured
group policy
What type of policy issues certificates of insurance to the insureds
A level premium for the life of the insured
What type of premium is charged on a straight life policy
single premium whole life
What type of whole life insurance policies only require a payment of premium at its inception and in addition to providing insurance protection for the life of the insured endows at the insured age 100
Single premium whole life
What type of whole life insurance policy generates immediate cash value
Option A
What universal life option has a gradually increasing cash value and a level death benefit
When the premium paid are more than the cost of the policy
When does an adjustable life policy accumulate cash value
Evidence of insurability
When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured
When the insured reaches age 100
When would a 20-pay whole life policy endow
The policy owner
Who is entitles to the cash values in a life insurance policy
A minor
Who is insured under a juvenile life policy
The employer(sponsor of the group)
Who owns a group life insurance contract
The full death benefit
Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy dies at age 80, and there are no outstanding loan on the policy, what portion of the death benifit will be paid to the beneficiary
Age 100
Whole life policies provide protection until the insured reaches what age
There is no cash value to borrow against
Why are policy loans not available on term insurance
Deferred
Withheld or postponed until a specified time or event in the future
Nonforteiture values
benefits in a life insurance policy that the policy owner cannot lose even if the policy is surrendered or lapses
Securities
financial instruments that may trade for value (stocks, bonds, options)
Policy maturity
in life policies the time when the face value is paid out
Lapse
policy termination due to nonpayment of premium
Level premium
the premium that does not change throughout the life of the policy
The death benefit increases each year by the amount of cash value increases
under Option B in a universal life policy what happens to the death benefit
Anually Renewable Term
Group life insurance policies are written as what type of insurance
The premium is based on the average age of the insureds
How is the premium determined in a joint life insurance policy
Evidence of insurability
If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide
whole life
If an insured terminates membership in group life insurance to what type of insurance can the insured convert the coverage
Upon the first death
In a joint life policy when is the death benefit paid
The insureds attained age
In annually renewable term policies what is the annual premium based upon
Cash Value
A policies savings element or living benefit
20 year level term
A policy states that it will pay a specific face amount if the insured dies during the 20 year premium paying period and nothing if death occurs after the 20 year period. What type of policy is this
Tax deferred
Regarding taxation, how does the cash value of a universal life policy accumulate
Face Amount
The amount of benefit states in the life insurance policy
Annually renewable term
The death protection component of universal life policy is expressed as what type of coverage
Attained Age
The insureds age at the time the policy is renewed or replaced
Age 100
The policy owner of a whole life insurance policy is also insured. What age must the insured attain in order to receive the policies face amount
Endow
To have the cash value of a whole life policy reach the contractual face amount
For 20 year or until the insureds death whichever occurs first
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 what time period
Guaranteed and current
Universal life policies have two types of interest rates what are they
Groups purpose, size, financial strength and turnover
What are the characteristics of the group that underwriters will consider before issuing a group life policy
Option A- level death benefit, and Option B- increasing death benefit
What are the death benefit options in universal life policies
Loan values
What are the living benefits of whole life insurance
Face amount
What does level refer to in level term insurance
The amount and payment of the premium the face amount and the period for protection
What elements of an adjustable life policy can be changed by the policy owners
Cash value is paid to the policyowner
What happens to the cash value when a whole life insurance policy matures
The premium increases with each renewal
What happens to the premium in an annually renewable term life policy
Evidence of insurability is not required
What is the main advantage of converting from group life insurance to individual coverage
Premium payment mode
What is the major difference between the most common types of whole life polices: straight life, limited payment and single premium
To prevent the policy from lapsing
What is the purpose of establishing the target premium for a universal life policy
Face amount
What policy component must decrease in decreasing term insurance