Life Policies
All of these are characteristics of a universal life insurance policy EXCEPT:
(EXCEPTION: Fixed Surrender Value.)
A Renewable Term Life insurance policy can be renewed:
At a predetermined date or age, regardless of the insured's health. Renewable Term Life insurance guarantees the policy can be renewed regardless of the insured's health status.
A limited payment whole life policy provides:
Lifetime Protection. Premiums on limited payment whole life insurance are paid for a limited number of years, but the benefits last a lifetime.
What describes the result of a modified endowment contract that failed to meet the seven-pay test?
Pre-Death distributions are typically taxable.
Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test?
Pre-Death distributions are typically taxable.
How are survivorship life insurance policies helpful in estates planning?
Provide funds to help pay taxes on assets.
Term Insurance is appropriate for someone who...
Seeks temporary protection and lower premiums
What is a corridor in relation to a Universal Life Insurance policy?
The gap between the total death benefit and the policy's cash value. The corridor is the gab between a Universal Life Policy's total death benefit and the policy's cash value.
The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is:
The shorter the payment period, the higher the premium. The shorter the payment period, the higher the annual premium for a (whole life policy).
These are some characteristics of a universal life insurance policy:
1. Flexible death benefit 2. Flexible premiums 3. Builds cash value
Which policy feature makes a universal life policy different from a whole life policy?
A flexible premium schedule
A Modified Endowment Contract (MEC) is best described as:
A life insurance contract which accumulates cash values higher than the IRS will allow
Which type of multiple protection policy pays on the death of the last person?
A survivorship life policy
The least expensive option to pay off a 30-year mortgage balance would be:
Decreasing Term Life
All of these are valid options for an Adjustable Life Policy EXCEPT:
EXCEPT (A non-forfeiture option can be used to increase the death benefit.) Valid ones included: 1. The policy's premium can be increased or decreased 2. The policy's death benefit can be increased or decreased 3. The policy's protection period can be modified
All of these statements concerning whole life insurance are false EXCEPT:
EXCEPT: (when a whole life policy is surrendered, income taxes may be owed.) Income taxes may be due when a whole life policy is surrendered. Besides that: 1. Policyowner can take out a policy loan up to the face amount. 2. Coverage is normally temporary 3. The death benefit is not affected by outstanding loans.
Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?
Equity index whole life.
Which of these riders will pay a death benefit if the insured's spouse dies?
Family Term Insurance Rider
A spouse and child can be added to the primary's insured's coverage as what kind of rider?
Family Term.
Index whole life insurance contains a securities component that acts as a (n)
Hedge against inflation
Index whole life insurance contains a securities component that acts as a (n):
Hedge against inflation
A business will typically use which type of life insurance to cover their employees?
Group Policy
A permanent life insurance policy where the policyowner pays premiums for a special number of years is called a (n):
Limited pay policy.
The type of multiple protection coverage that pays on the death of the last person is called a (n):
Survivorship life policy. It's the policy that pays on the death of the last person under a multiple protection policy.
Which of the following policies does NOT build cash value?
Term
What type of life insurance is usually used for key employee indemnification?
Term, whole, and universal life insurance
Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000.00. Which of these statements is true?
The face amount and the premium will remain constant over the 10-year period. In this situation, the premium and the face amount will remain constant for the 10-year period.
A renewable Term Life insurance policy allows the policyowner the right to renew the policy:
Without producing proof of insurability. If term life insurance is renewable, the policyowner is purchasing the right to renew the policy without showing proof of insurability.
A policyowner may change two policy features on what type of life insurance?
Adjustable Life. It allows the policyowner to change two features such as the premium and the face amount.
A life insurance policy written on one contact for two people in which it is payable upon the first death is called:
Joint
Donald is the primary insured of a life insurance policy and adds a children's tern rider. What is the advantage of adding this rider?
Can be converted to permanent coverage without evidence of insurability.
Which type of life insurance is normally associated with Payor Benefit rider?
Juvenile Insurance. A Payor Benefit Rider waives the premium ONLY in connection with juvenile insurance.
Joe has a life insurance policy that has a face amount of $300,000.00. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000.00. What kind of policy is this?
Universal Life Policy
This is considered to be the best example of a limited pay life insurance policy:
Whole life policy with premiums paid up after 20 years.
Shawn, Mike and Dave are brothers who have a $100,000.00 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds...
Will no longer provide insurance protection. If Mike dies first, the policy proceeds will no longer provide further insurance protection.
