Life Insurance Primerica

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An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died. What amount would his beneficiary receive as a settlement?

$200,000

An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out?

$50,000

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured

Which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years?

A policy summary

For variable products, underlying assets must be kept in

A separate account

The minimum interest rate on an equity indexed annuity is often based on

An index like Standard & Poor's 500

The death protection component of Universal Life Insurance is always

Annually Renewable Term

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

Annually Renewable Term policy with a cash value account

When an annuity is written, whose life expectancy is taken into account?

Annuitant

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

Which of the following best describes fixed-period settlement option?

Both the principle and interest will be liquidated over a selected period of time

Which of the following features of the Indexed Whole Life policy is NOT fixed?

Cash value growth

All of the following are duties and responsibilities of producers at the time of application EXCEPT

Change any incorrect statement on the application by personally initialing next to the corrected statement (must be initialed by the applicant)

If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to

Charge a higher premium

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

Representations are written or oral statements made by the applicant that are

Considered true to the best of the applicant's knowledge

What characteristic makes whole life permanent protection?

Coverage until death or age 100

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type is it?

Deferred

The death benefit in a variable universal life policy

Depends on the performance of a separate account

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)

Equity Indexed Annuity

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

Face amount

Which policy component decreases in decreasing term insurance?

Face amount

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

The death benefit under the Universal Life Option B

Gradually increases each year by the amount that the cash value increases

Which of the following terms best describe the coverage provided by term policies, as compared to any other form of protection?

Greatest

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

Life income joint and survivor settlement option guarantees

Income for 2 or more recipients until they die

A Return of Premium term life policy is written as what type of term coverage?

Increasing

What are the two components of a universal policy?

Insurance and cash account

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

An insured purchased a Life insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy issue at the time. This policy is a/an

Interest-sensitive Whole Life

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period during which the payments into the annuity grow tax deferred

Which of the following is TRUE regarding the accumulation period of an annuity?

It is a period of time during which the payments into the annuity grow tax deferred

Which best describes annually renewable term insurance?

It is level term insurance

Which of the following best describes annually renewable term insurance?

It is term level insurance

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children there are

Which statement is NOT true regarding a Straight Life Policy?

It's premium steadily decreases over time, in response to its growing cash value

Which statement is NOT true regarding a Straight Life policy?

It's premium steadily decreases over time, in response to its growing cash value

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

The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called

Joint and survivor

Which of the following settlement options is known as straight life?

Life income

Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

What are the licensing requirements for someone who sells variable universal life insurance?

Life insurance and securities

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

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower

If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer?

Lump sum

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. This dividend option is called

Paid-up additions

An insured has a continuous premium whole life policy. She would like the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?

Paid-up option

Which option is being utilized When the insurer Accumulates dividends at interest and uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

Paid-up option

Which of the following is another term for the accumulation period of an annuity?

Pay-in period

Which will be included in a policy summary?

Premium amounts and surrender values

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt

The policyowner pays for her life insurance annually. Until now, she has collected a non taxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would she use?

Reduction of premium

When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all the premiums paid. Which rider is attached to the policy?

Return of premium

Equity indexed annuities

Seek higher returns

Which of the following best details the underwriting process for life insurance?

Selection, classification, and rating of risks

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium

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 of 100 is called

Single premium whole life

Which of the following determines the length of time that benefits will be received under the Fixed-Amount settlement option?

Size of each installment

Which of the following is a risk classification used by underwriters for insurance?

Standard

Which of the following policies would be classified as a traditional level premium contract?

Straight Life

Which of the following is called a second-to-die policy?

Survivorship life

Which of the following would help prevent a universal life policy from lapsing?

Target premium

The interest earned on policy dividends is

Taxable

Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?

Term

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

Which of the following is true regarding variable annuities?

The annuitant assumes the risk on investment

Which of the following is NOT true regarding the annuitant?

The annuitant cant 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 is true?

The annuitant must be a natural person.

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

The beneficiary

Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?

The beneficiary will only receive payments of the interest earned on the death benefit

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.

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

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for the rest of her life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT:

The insured's age at death

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy

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 determine the cash value of a variable life policy?

The performance of the policy portfolio

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

The policy owner 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

Which of the following is TRUE regarding the premium in term policies?

The premium is level

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

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be in the policy

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities

Which of the following is TRUE for both equity and annuities and fixed annuities?

They have a guaranteed minimum interest rate

Which of the following is TRUE for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

What kind of policy allows withdrawals or partial surrenders?

Universal Life

Which type of life insurance policy allows the policy owner to pay more or less than the premium?

Universal Life

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

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

Universal life

Which of the following types of policies will provide permanent protection?

Whole life

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant

With the policy


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