MO Life - 22 Life Ins Policy
Q: Who owns a group life insurance contract?
A: The employer (also known as the sponsor of the group)
Q: Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?
A: The full death benefit
Q: In annually renewable term policies, what is the annual premium based upon?
A: The insured's attained age
Q: What type of life insurance is best suited to cover a mortgage?
A: Decreasing term
Q: What type of life insurance policy provides permanent protection?
A: Whole life
Q: If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide?
A: Evidence of insurability
Q: In term policies, what happens to the premium throughout the term of the policy?
A: The premium remains level
Q: Why are policy loans not available on term insurance?
A: There is no cash value to borrow against
Q: In a joint life policy, when is the death benefit paid?
A: Upon the first death
Q: When would a 20-pay whole life policy endow?
A: When the insured reaches age 100
Q: When does an adjustable life policy accumulate cash value?
A: When the premiums paid are more than the cost of the policy
Q: Group life insurance policies are written as what type of insurance?
A: Annually renewable term
Q: The death protection component of a universal life policy is expressed as what type of coverage?
A: Annually renewable term
Q: If an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage?
A: Whole life
Q: A policy states that it will pay a specified 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?
A: 20-year level term
Q: What type of premium is charged on a straight life policy?
A: A level premium for the life of the insured
Q: Who is insured under a juvenile life policy?
A: A minor
Q: Whole life policies provide protection until the insured reaches what age?
A: Age 100
Q: What are the characteristics of the group that underwriters will consider before issuing a group life policy?
A: Group's purpose, size, financial strength and turnover
Q: Universal life policies have two types of interest rates. What are they?
A: Guaranteed and current
Q: The policyowner of a whole life insurance policy is also the insured. What age must the insured attain in order to receive the policy's face amount?
A: Age 100
Q: In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?
A: Universal life
Q: In variable universal life insurance, to what policy component does the term 'variable' refer?
A: Cash value and death benefit
Q: What type of life insurance policy can be changed from a policy with no cash value to one that generates cash value?
A: Convertible term
Q: An individual has just borrowed $10,000 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?
A: Decreasing term
Q: When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured?
A: Evidence of insurability
Q: What is the main advantage of converting from group life insurance to individual coverage?
A: Evidence of insurability is not required
Q: During partial withdrawal from a universal life policy, which portion, if any, will be taxed?
A: Interest earned on the withdrawn cash value
Q: What type of life insurance policy is Life Paid-up at Age 65?
A: Limited-pay Whole Life
Q: A whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy?
A: Limited-pay whole life
Q: What are the "living benefits" of whole life insurance?
A: Loan values
Q: What universal life option has a gradually increasing cash value and a level death benefit?
A: Option A
Q: What is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single Premium?
A: Premium payment mode
Q: What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100?
A: Single premium whole life
Q: What type of whole life insurance policy generates immediate cash value?
A: Single premium whole life
Q: Regarding taxation, how does the cash value of a universal life policy accumulate?
A: Tax deferred
Q: What happens to the premium in an annually renewable term life policy?
A: The premium increases with each renewal
Q: How is the premium determined in a joint life insurance policy?
A: The premium is based on the average age of the insureds
Q: What is the purpose of establishing the target premium for a universal life policy?
A: To prevent the policy from lapsing
Q: Under Option B in a universal life policy, what happens to the death benefit?
A: Under Option B, the death benefit increases each year by the amount of the cash value increases
Q: Between adjustable life and universal life policies, which one provides more flexibility to the policyowner?
A: Universal life
Q: 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?
A: For 20 years or until the insured's death, whichever occurs first.
Q: What elements of an adjustable life policy can be changed by the policyowners?
A: The amount and payment period of the premium, the face amount, and the period for protection
Q: Who is entitled to the cash values in a life insurance policy?
A: The policyowner
Q: What are the death benefit options in universal life policies?
A: Option A - level death benefit, and Option B - increasing death benefit
Q: A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary?
A: The amount of the loan will be subtracted from the death benefit.
Q: What happens to the cash value when a whole life insurance policy matures?
A: Cash value is paid to the policyowner
Q: What does "level" refer to in level term insurance?
A: Face amount
Q: What policy component must decrease in decreasing term insurance?
A: Face amount
Q: What type of life insurance policy offers pure death protection?
A: Term
