Life Insurance Polciies

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? A. Option B B. Corridor option C. Variable option D. Option A

A. Option B

A flexible premium universal life insurance policy must provide a grace period of A. 10 days B. 30 days C. 60 days D. 90 days

B. 30 days

In Modified Life policies, what happens to the premium? A. It varies at the beginning, but levels out by the end of the third year B. It is level at the beginning and increases after the first few years C. It always remains level D. It is higher during the first policy years

B. It is level at the beginning and increases after the first few years

All of the following entities regulate variable life policies EXCEPT A. The SEC B. The Insurance Department C. The Guaranty Association D. Federal Government

C. The Guaranty Association

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to the beneficiary, the premiums must be paid A. For 20 years or until death, whichever occurs first B. Until the policyowner reaches age 65 C. For at least 20 years D. Until the policyowner's age 100, when the policy matures

A. For 20 years or until death, whichever occurs first

Which of the following policies would have an IRS required corridor or gap between teh cash value and the death benefit? A. Universal Life- Option A B. Universal Life - Option B C. Equity Indexed Universal Life D. Variable Universal Life

A. Universal Life - Option A

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is incorrect? A. The premium for individual coverage will be based upon the insured's attained age B. The insured may choose to convert to term or permanent individual coverage C. The insured would not need to prove insurability for a conversion policy D. The insured may convert coverage to an individual policy within 31 days

B. The insured may choose to convert to term or permanent individual coverage

When would a 20-pay whole life policy endow? A. At the insured's age 65 B. After 20 payments C. In 20 years D. When the insured reaches age 100

D. When the insured reaches age 100

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

A. Life Paid-up at Age 65

If a statement of policy information is not furnished to the applicant at the time of application, how soon must the form be delivered to the applicant? A. 10 days B. 15 days C. 30 days D. 45 days

B. 15 days

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium? A. It will remain the same for the new 5-year term B. It will decrease for the new 5-year term since the insured is now a lesser risk to the company C. It will increase each year during the next 5 years as the face amount increases each year D. It will increases because the insured will be 5 years older than when the policy was originally purchased

D. It will increases because the insured will be 5 years older than when the policy was originally purchased

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? A. The insured would not need to prove insurability for a conversion policy B. The insured may convert coverage to an individual policy within 31 days C. The premium for individual coverage will be based upon the insured's attained age D. The insured may choose to convert to term or permanent individual coverage

D. The insured may choose to convert to term or permanent individual coverage

Which type of life insurance policy generates immediate cash value? A. Single Premium B. Level Term C. Decreasing Term D. Continuous Premium

A. Single Premium

To sell variable life insurance policies, an agent must receive all of the following EXCEPT A. A life insurance license B. SEC registration C. FINRA registration D. A securities license

B. SEC registration

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct? A. The death benefit can be increased by providing evidence of insurability B. The death benefit cannot be increased C. The death benefit can be increased only when the policy has developed a cash value D. The death benefit can be increased only by exchanging the existing policy for a new one

A. The death benefit can be increased by providing evidence of insurability

Which of the following best describes annually renewable term insurance? A. Neither the premium nor the death benefit is affected by the insured's age B. It provides an annually increasing death benefit C. It is level term insurance D. It requires proof of insurability at each renewal

C. It is level term insurance

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? A. Life annuity with period certain B. Increasing term C. Limited pay whole life D. Interest-sensitive whole life

C. Limited pay whole life

B just bough a new car, which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B? A. Limited Pay B. Interest-sensitive Whole Life C. Modified Life D. Limited Term

C. Modified Life

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy? A. Indeterminate premium B. Enhanced life C. Modified life D. Indexed life

C. Modified life

All of the following are characteristics of group life insurance EXCEPT A. Amount of coverage is determined according to nondiscriminatory rules B. Individuals covered under the policy receive a certificate of insurance C. Certificate holders may convert coverage to an individual policy without evidence of insurability D. Premiums are determined by the age, sex, and occupation of each indivdual certificate holder

D. Premiums are determined by the age, sex, and occupation of each individual certificate holder

When an employee terminates coverage under a group insurance policy, coverage continues in force A. Until the employee notifies the group insurance provider that coverage conversion policy is issued B. For 31 days C. For 60 days D. Until the employee can obtain coverage under a new group plan

B. For 31 days

Which of the following policies would be classified as a traditional level premium contract? A. Variable Universal Life B. Straight Life C. Adjustable Life D. Universal Life

B. Straight Life

An employee quits his job on May 15 and doesn't convert his Group Life to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen? A. The insurer will pay nothing because the employee has terminated his group insurance and hasn't started the individual one B. The insurer will pay the full death benefit from the group policy to the beneficiary C. The insurer will pay a reduced death benefit to the beneficiary D. The insurer will pay the death benefit minus one month's premium

B. The insurer will pay the full death benefit from the group policy to the beneficiary

A policyowner of a universal life insurance policy must receive a policy status report from the insurer at least A. Monthly B. Semi-annually C. Annually D. Every five years

C. Annually

What is another name for interest-sensitive whole life insurance? A. Term life B. Adjustable life C. Current assumption life D. Variable life

C. Current assumption life

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT A. The premium B. The amount of insurane C. The type of investment D. The length of coverage

C. The type of investment

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? A. Those who have dependents B. Those who have no history of claims C. Those who have been insured under the plan for at least 5 years D. Those who have worked in the company for at least 3 years

C. Those who have been insured under the plan for at least 5 years

Which statement is NOT true regarding a Straight Life policy? A. The face value of the policy is paid to the insured at age 100 B. It usually develops cash value by the end of the third policy year C. It has the lowest annual premium of the three types of Whole Life policies D. Its premium steadily decreases over time, in response to its growing cash value

D. Its premium steadily decreases over time, in response to its growing cash value

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy A. Built cash values B. Required proof of insurability every year C. Decreased death benefit at each renewal D. Required a premium increase each renewal

D. Required a premium increase each renewal

At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a polciy that can be modified to accommodate those changes as they occur. Which of the following polciies would most likely fit his needs? A. Adjustable Life B. Single Premium Whole Life C. Interest-sensitive Whole Life D. Decreasing Term

A. Adjustable Life

At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs? A. Adjustable Life B. Single Premium Whole Life C. Interest-sensitive Whole Life D. Decreasing Term

A. Adjustable Life

The death benefit under the Universal Life Option B A. Gradually increases each year by the amount that the cash value increases B. Decreases by the amount that the cash value increases C. Increases for the first few years of the policy, and then levels off D. Remains level

A. Gradually increases each year by the amount that the cash value increases

Which statement is NOT true regarding a Straight Life policy? A. Its premium steadily decreases over time, in response to its growing cash value B. The face value of the policy is paid to the insured at age 100 C. It usually develops cash value by the end of the third policy year D. It has the lowest annual premium of the three types of Whole Life policies

A. It's premium steadily decreases over time, in response to its growing cash value

An Adjustable Life policyowner can change which of the following policy featuers? A. The coverage period B. The mortality expense C. The investment account D. The insured

A. The coverage period

In a group life insurnace policy, the employer may select all of the following EXCEPT A. The amount of insurance B. The premium payor C. The beneficiary D. The type of insurance

C. The beneficiary

The LEAST expensive first-year premium is found in which of the following policies? A. Annually Renewable Term B. Increasing Term C. Decreasing Term D. Level Term

A. Annually Renewable Term

Graded-Premium Whole Life policy premiums are typically lower initially, but gradually increase for a period of 5 to 10 years. After the period of increase the premiums will A. Be level thereafter B. Continue to increase C. Return to the initial premium amount D. Decrease again

A. Be level thereafter

Which of the following statements about group life is correct? A. The cost of coverage is based on the ratio of men and women in the group B. The premiums are higher than in an individual policy because there is no medical exam C. The group sponsor receives a Certificate of Insurance D. The policy can be converted to an individual term insurance policy

A. The cost of coverage is based on the ratio of men and women in the group

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a A. Adjustable Life B. Interest-sensitive Whole Life C. Credit Life D. Annual Renewable Term

B. Interest-sensitive Whole Life

Which of the following policies is characterized by a provision where the premiums are lower in the early years of the policy and increase over time to a point where they become level for the remainder of the policy? A. Minimum deposit whole life B. Graded premium whole life C. Indeterminate premium whole life D. Enhanced whole life

B. Graded premium whole life

Which Universal Life option has a gradually increasing cash value and a level death benefit? A. Term insurance B. Option B C. Option A D. Juvenile life

C. Option A

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may A. Prolong the open enrollment period B. Increase medical requirements on existing members C. Require evidence of insurability D. Require a higher premium

C. Require evidence of insurability

An employee has group life insurance through her employer. After 5 years, she decideds to leave the company and work independently. How can she obtain an individual policy? A. She can only covert her coverage without proof of insurability if she has the master policy B. She must apply for a new policy, which requires her proof of insurability C. She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan D. She will still be covered under the group plan, but will have to pay an individual policy premium

C. She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan

An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? A. Graded Premium Life B. Limited-pay Life C. Variable Life D. Adjustable Life

B. Limited-pay Life

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy? A. Enhanced life B. Modified life C. Indexed life D. Indeterminate premium

B. Modified life

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may A. Increase medical requirements on existing members B. Require evidence of insurability C. Require a higher premium D. Prolong the open enrollment period

B. Require evidence of insurability

Which of the following are generally NOT considered when underwriting group insurance? A. The size of the group B. The insureds' medical history C. The nature of the group D. The group's past claim experience

B. The insured's medical history

Annually renewable term policies provide a level death benefit for a premium that A. Remains level B. Fluctuates C. Increases annually

C. Increases annually

Annually renewable term policies provide a level death benefit for a premium that A. Remains level B. Fluctuates C. Increases annually D. Decreases annually

C. Increases annually

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called A. Modified Endowment Contract (MEC) B. Level term life C. Graded premium whole life D. Single premium whole life

D. Single premium whole life