Ch. 3 Quiz Life Policies
Which of theses provisions require proof of insurability after a policy has lapsed?
reinstatement
A life insurance policy that provides a policy owner with cash value along with a level face amount is called:
whole life
All of these Settlement options involve the systematic liquidation of the death proceeds in the event of the insured's death, EXCEPT:
Interest Only
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. what kind of policy is needed?
Level term
which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment Contract
which policy an agent requires to register with the National Association of Securities Dealers (NASD) before selling
Variable Life- because transfer of investment risk from the insurer to the policy owner.
Which of these Nonforfeiture Options continue a build-up of cash value?
Reduced Paid-Up
all of these are characteristics of an Adjustable Life policy,
adjustable premiums, adjustable premium payment period, combination of term and whole life insurance
How long does the coverage normally remain on a limited-pay life policy?
age 100
The automatic premium loan provision is designed to:
avoid a policy lapse
S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT
beneficiary's age
the investment gains from a Universal Life Policy usually go toward:
cash value
additional coverage can be added to a Whole Life policy by adding a:
decreasing term rider
conversion privilege
enables an individual to leave the group and continue his or her insurance without providing evidence of insurability
Variable Life products require a producer to
hold a Life Insurance licenses and a Securities license
Which of the following actions require a policy owner to provide proof of insurability in an Adjustable Life policy?
increase face amount
The Accidental Death and Dismemberment (AD&D) provision in a life insurance policy would pay additional benefits if the insured:
is blinded in an accident
Which of the following statements is CORRECT about the period in which a Term Policy can be converted?
it varies according to the contracts
Term Life
life insurance gives the greatest amount of coverage for a limited period of time
Variable Life Policy
offer the owner investment in products such as money-market funds, long term bonds and equities.
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
Term insurance has which of the following characteristics?
Expires at the end of the policy period
What type of policy would offer a 40-year old the quickest accumulation of cash value?
20-pay life
which statement is TRUE regarding a Variable Whole Life policy?
A minimum guaranteed Death benefit is provided
The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):
Accidental Death and Dismemberment rider (AD&D)
What action can a policy owner take if an application for a bank loan requires collateral?
Assign policy ownership to the bank
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
a Family Income Policy is a combination of Whole Life and
Decreasing Term insurance
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:
Modified Whole Life
A young, married teacher has two children and owns a Whole Life policy. If the teacher wants an increasing Death Benefit to protect against inflation, the teacher should select which of the following Dividend Options?
Paid-Up Additional Insurance
Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policy owner becomes disabled?
Payor clause
Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors?
Universal Life
Which of theses types of life insurance allows the policy owner to have level premiums and to also choose from a selection of investment options?
Variable Life
A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached?
Waiver of Premium
what kind of life insurance product covers children under their parent's policy?
a term rider
Additional coverage can be added to a Whole Life policy by adding a(n):
accelerated benefit rider
whole life policy
cash value may be borrowed against
