QUIZ 3: life insurance
variable life
- gives ownership of policy ways to invest their cash value - cash value kept in separate account - SEC/FINRA registration - life insurance license and securities
term insurance
- least expensive - No cash value - matures at death - is renewable - max protection for lowest cost
who must have insurable interest of the insured?
Beneficiary
Which policy component decreases in decreasing term insurance?
Face amount
which of the following best describes annually renewable term insurance?
It is level term insurance
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint life
Gross annual premium
Net premium plus loading expenses.
Single premium
Paying a full premium in one single payment
Which of the following policies would be classified as a traditional level premium contract?
Straight life
which of the following policies would be classed as a traditional level premium contract
Straight life-have level guaranteed face amount and level premium for the life of the insured
which of the following are generally Not considered when underwriting group insurance?
The insured medical history
Which type of life insurance policy allows the policy-owner to pay more or less than the planned premium?
Universal life-has the flexibility to increase the amount of premium going into the policy and later decreasing again.
vatical settlement
agreement entered into between a vatical settlement company and Viator in which the company pays compensation in return for viators assignment, transfer, sale, devise or bequest of the death benefit or ownership of the insurance policy to the vatical settlement company
decreasing term
amount decreases as the amount of debt is reduced, feature a level premium and death benefit that decreases each year.
Perils
causes of loss insured against in an insurance policy
who is the owner and beneficiary on a key person life insurance policy?
employer
Annually renewable term
end of the year you can keep your policy but you have to pay next years premium
Universal life
may skip payment as long as cash value exceeds the premium
Limited pay
pay a set of years or to a specified age
Straight life
pay until death or age 100
all of the following are characteristics of group life insurance except
premiums are determined by the age sex and occupation of each individual certificate holder
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insure may
require evidence of insurability
all of the following are characteristics of a group life insurance plan EXCEPT
there Is a requirement to prove insurability on part of the participants
Policy backdating
to lower premium based on insured age
which of the following life insurance policies would be considered interest sensitive
universal life
An individual has just borrowed 10,000$ from his bank on a 5 year installment loan requiring monthly payments. what type of life insurance policy would be best suited to this situation?
Decreasing term-face amount decreases as the amount of debt is reduced
Human life value approach
Determined by the loss of income that would result with the death of the insured, after making adjustments for expenses, inflation, etc..
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