Life Insurance Policies (Ch.3)

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000 since death benefit is paid upon first death.

In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?

5 years

In a survivorship life policy, when is the death benefit paid?

After the second death.

A universal life policy is best described as a(an)

Annually renewable term policy with a cash account

Variable whole life insurance is based on what type of premium?

Level-fixed premium

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?

Limited payment whole life (LP-65)

A domestic insurer issuing variable contracts must establish one or more

Separate Accounts. Any domestic insurer issuing variable contracts must establish one or more separate accounts. The insurer must maintain in each separate account assets with a value = to the reserves and other contract liabilities connected to the account.

When would a 20-pay whole life policy endow?

When the insured reaches age 100, endows for face amount if insured reaches 100. The premium is what is paid off in 20 years.

For variable products, underlying assets must be kept in

a separate account.

An employee quits his job on May 15 and doesn't convert his Group Life policy 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?

The insurer will pay the full death benefit to the beneficiary since the employee had 31 days to convert to an individual policy.

All of the following are true regarding a decreasing term policy EXCEPT

The payable premium amount steadily declines throughout the duration of the contract

All of the following are true about variable products except?

The premiums are invested in the insurer's general account