Chapter 3 life insurance exam

N is a 40 - year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums , permanent protection , and be paid - up at retirement . Which of these should N purchase ?

30 Pay Life

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

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called :

Limited Pay Life

Variable Life products require a producer to

Ohold a Life Insurance license and a Securities license

Who benefits in Investor - Originated Life Insurance ( IOLI ) when the insured dies ?

Opolicyowner

What type of life insurance incorporates flexible premiums and an adjustable death benefit ?

Universal Life

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy ?

increase face amount

Whole Life insurance policies are contractually guaranteed to provide each of the following , EXCEPT

partial withdrawal features beyond a surrender charge period

Which statement is TRUE regarding a Variable Whole Life policy ?

A minimum guaranteed Death benefit is provided

Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability ?

Conversion privilege

Whole Life insurance is sometimes referred to as " Straight Life " . What does the word " Straight " indicate when using this phrase ?

The duration of premium payments

Life insurance immediately creates an estate upon the death of an insured . Which of the following policies is characterized by a guaranteed minimum death benefit ?

Variable Life

Which policy requires an agent to register with the National Association of Securities Dealers ( NASD ) before selling ?

Variable Life

A potential client , age 40 , would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy . Which of these statements made by the producer would be correct ?

20 - Pay Life accumulates cash value faster than Straight Life

What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability

Convertible Term

The combination of Whole Life and ________ Term insurance is referred to as a Family Income Policy

Decreasing

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time ?

Decreasing term

P owns a $ 25,000 Life Policy that pays the face amount to him if he lives to age 70 , or to his beneficiary if he dies before age 70. What kind of policy does P own ?

Endowment at Age 70

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds , but will still protect the principal with a minimum level or risk . Which product would S be advised to purchase ?

Equity index insurance

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Family Maintenance Policy

Which of the following information is NOT required to be included in a Whole Life policy ?

Policy's guaranteed dividend table

Which of these characteristics is consistent with a Straight Life policy ?

Premiums are payable for as long as there is insurance coverage in force

T has a term policy that allows him to continue the coverage after expiration of the initial policy period . What type of term coverage is this ?

Renewable

Under a Graded Premium Whole Life policy

The premium increases each year during the early years of the contract and remains the same after that time

All of these statements about Equity Indexed Life Insurance are correct , EXCEPT

The premiums can be lowered or raised , based on investment performance

Y purchased $ 100,000 worth of permanent protection on himself and $ 50,000 worth of 10 - year Term coverage for his wife on the same policy . Which of these policies did Y purchase ?

Whole Life policy with an Other Insured Rider

Under a Graded Premium policy , the premiums

are lower during the policy's early years the policy

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is :

the cost

Stranger - Owned Life Insurance ( STOLI ) is when a person purchases life insurance only to sell to a ( n )

third - party with no insurable interest

Term Life Policies that have the ability to be specific time period . This conversion period converted to permanent coverage may do so during a

varies according to the contract

If a 10 - Year Term Life policy contains a Renewability provision , the policy will renew

without evidence of insurability