4 - Life Insurance Policies - Provisions, Options and Riders - Exam 1

a modified endowment contract

An insurance policy written after 1988 that fails to pass the seven-pay test is known as

Second-to-die policy

John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them?

10%

Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2?

Modified premium, ordinary life, single premium

What is the proper order of initial life insurance premiums, from lowest to highest?

Applicants are not required to answer medical questions on the application

Which of the following is NOT a true description of non-medical life insurance?

Conversion of child's coverage to permanent insurance requires evidence of insurability

Which of the following is NOT true regarding a family policy that covers children?

endowment insurance

A life insurance policy that pays the face amount if the insured survives to a specified period of time is called

variable life

A life insurance policy where the insured can choose where the cash value can be invested is called

the policy's face amount

A life insurance policy's limit of liability would be

10%

In a modified endowment contract, the penalty tax imposed on withdrawals is

require a higher premium payable at each renewal

In a renewable term life insurance policy, the contract will usually

Non-medical

Which of the following is a life insurance policy that does NOT require a physical exam?

Only children born prior to policy's issue date may be included

Which of the following statements do NOT apply to child coverage in a family policy?

Universal life

Which of the following types of life insurance combines a savings element along with a flexible premium option?

Decreasing term"

Which of the following types of life insurance is normally associated with a mortgage loan?