CH 2: Types of Life Policies

Decreasing term

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?

Flexible premium

Both Universal Life and Variable Life have a

b) The owner must be the party to receive the benefits

All of the following are true of an annuity owner EXCEPT a) The owner is the party who may surrender the annuity b) The owner must be the party to receive the benefits c) The owner pays the premium on the annuity d) The owner has the right to name the beneficiary

Annually Renewable Term

The death protection component of Universal life insurance is always

Level fixed

Variable life insurance is based on what kind of premium?

The annuitant assumes the risks on investment

Which of the following is TRUE regarding variable annuities?

c) death benefit

The term "fixed" in a fixed annuity refers to all of the following EXCEPT a) equal annuity payments b) amount and length of payments c) death benefit d) guaranteed rate of interest

It is level term insurance

Which of the following best describes annually renewable term insurance?

Either the amount paid into the plan or the cash value of the plan, whichever is the greater amount

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

The death benefit can be increased by providing evidence of insurability

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

a) Life Paid-up at Age 65

Which of the following is an example of a limited-pay life policy? a) Life Paid-up at Age 65 b) Renewable Term to Age 70 c) Level Term Life d) Straight Life

They earn lower interest rates than fixed annuities

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

They have a guaranteed interest rate

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