LIFE INSURANCE POLICIES
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value.
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement of age 65. What would be the right policy for the is client?
Limited pay whole life
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
Lower
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
A domestic insurer has just decided to change the investment policy of a separate account. After this change is filed with the Director, how soon will it become effective?
60 days
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account
The death protection component of Universal Life Insurance is always
Annually Renewable Term
All other factors being equal, the least expensive first-year premium payment is found in
Annually Renewable Term.
An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Attained age
All of the following statements are correct regarding Credit Life Insurance EXCEPT
Benefits are paid to the borrower's beneficiary.
Which of the following is TRUE about credit life insurance?
Creditor is the policyowner.
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first.
A Universal Life insurance policy has two types of interest rates that are called
Guaranteed and Current
What are the two components of a universal policy?
Insurance and cash account
Credit Life insurance
Insures the life of a debtor
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?
It will increase because the insured will be 5 years older than when the policy was originally purchased.
An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provision would allow the insured to renew the policy and
Pay lower renewal premium by proving insurability.
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
Required a premium increase each renewal
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
Single premium whole life
Which of the following would help prevent a universal life policy from lapsing?
Target premium
In a group life insurance policy, the employer may select all of the following EXCEPT
The beneficiary
Which of the following statements about group life is correct?
The cost of coverage is based on the ratio of men and women in the group.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Which of the following statements is true regarding the cash value in a Universal life policy?
The insurer credits the cash value in the policy with a current interest rate.
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 from the group policy to the beneficiary.
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
