Life Insurance Policies- Provisions, Options and Riders

G has purchased a Family Income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?

10 years

When a husband and wife are insured jointly under a credit life insurance policy, the premium may NOT exceed?

150% of the rate permissible for a single life

What type of permanent Life insurance offers a guaranteed minimum face amount and allows for future increases in coverage? 1. Modified Whole Life 2. Increasing Whole Life 3. Increasing Term Life 4. Variable Life

4. Variable Life

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?

Level term

What kind of life insurance offers the policy-owner a cash value that is invested in a separate account?

Variable Life

A life insurance policy which is characterized by flexible premium payments is called what?

Variable Universal Life

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? 1. Payor provision 2. Accelerated Benefits provision 3. Assignment provision 4. Waiver of Premium provision

1. Payor provision

Which is true concerning a Variable Universal Life policy? 1. Policy-owner controls where the investment will go and selects the amount of the premium payment 2. Policy-owner has no say in where the investment will go but can choose the premium 3. The investment vehicle for this type of policy is held in the insurer's general portfolio 4. The Death benefit can vary but the policy-owner has no say in the Premium amount paid

1. Policy-owner controls where the investment will go and selects the amount of the premium payment

A life insurance policy that provides a policy-owner with cash value along with level face amount is called: 1. Whole life 2. Level term 3. Credit life 4. Ordinary life

1. Whole life

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy? Which of these statements made by the producer would be correct? 1. Straight life accumulates faster than Limited-pay Life 2. 20-Pay Life accumulated cash value faster than Straight Life 3. Cash value accumulation of both 20-Pay Life and Straight Life depend on the insurer's financial rating 4. 20-Pay Life and Straight Life accumulate cash value at the same rate

2. 20-Pay Life accumulated cash value faster than Straight Life

What type of policy would offer a 40-year old the quickest accumulation of cash value?

20-payment life

A 15-year mortgage is best protected by what kind of life policy? 1. Modified whole life 2. 15-year level term 3. 15-year decreasing term 4. Adjustable life

3. 15-year decreasing term

Life insurance that allows the death benefit to be modified is known as: 1. Whole Life 2. Modified Life 3. Variable Life 4. Adjustable Life

4. Adjustable Life

Which of these characteristics is consistent with a Straight Whole Life policy? 1. Owner can adjust both premium and death benefit 2. Premiums are lower in the first 5 years, increase in the 6th year, then levels off for the remaining length of the contract 3. Owner has the option of converting to term insurance 4. Premiums are payable for as long as there is insurance coverage in force

4. Premiums are payable for as long as there is insurance coverage in force

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing Term Policy

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?

Decreasing term

A life insurance policy offers cash value and is influenced by the S&P with guaranteed minimum rate of return is called what?

Equity Indexed life

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Family Maintenance Policy

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase?

Family Maintenance policy

What type of insurance policy covers a husband and wife as well as any future children for no additional premium?

Family Plan Policy

A Modified Life policy has similar characteristics and serves the same purpose as: 1. Graded Premium Term Life 2. Decreasing Term Life 3. Survivorship Life 4. Graded Premium Whole Life

Graded Premium Life

Life insurance that covers an insured's whole life with level premiums over a limited time is called what?

Limited Pay Whole Life

All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for: 1. Variable Life 2. Modified Whole Life 3. Universal Variable Life 4. Variable Annuity

Modified Whole Life

Life insurance that does NOT pass the 7-day test is called what?

Modified endowment contract

The initial amount of credit life insurance may NOT exceed what amount?

The total amount repayable under the contract of indebtedness

Universal Life insurance offers which of these features? 1. Flexible premiums and flexible face amount 2. Fixed premiums and fixed face amount 3. Fixed rate of return and fixed premiums 4. Flexible premiums and fixed face amount

1. Flexible premiums and Flexible face amount

Which of these life products is NOT considered interest-sensitive? 1. Modified Whole Life 2. Variable Universal Life 3. Interest Sensitive Whole Life 4. Variable Life

1. Modified Whole Life

What advantage does an equity-indexed life insurance policy have over a variable life policy?

A minimum Guaranteed rate of return

What is to be expected of a Modified Life policy?

An eventual change in the premium payments

The type of policy best suited to cover a husband and wife for mortgage protection would be what?

Joint Life

T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

Renewable

A husband and wife own a life insurance policy with their son named as beneficiary. The wife dies first, followed by the husband 5 years later. Their son receives the policy's face amount after his father dies. What type of policy was owned?

Survivorship Life

A life insurance policy that covers multiple insureds and pays the face amount following the death of the last insured is called what?

Survivorship Life

Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?

Whole life policy with other insured rider

A Survivorship Life policy's proceeds are typically used to: 1. pay estate taxes 2. pay off an existing mortgage 3.pay a lump sum to the surviving insured 4. pay for funeral expenses

pay estate taxes