Policies, Provisions, Options and Riders Exam Prep

K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?

$20,000.00 death benefit

Which of the following term life policies most likely contains a renewability feature increasing term, 10 year convertible term, decreasing term, or variable term

10 year convertible term

N is 40 years old who will retire at 70 and is looking to buy a life insurance policy with level premiums, permanent protection and be paid at retirement, what policy should N purchase

30 Pay life

Stranger owned life insurance is when a person purchases life insurance only to sell it to who

A third party with n insurable interest

Stranger owned life insurance or STOLI is when a person purchases life insure only to sell to who

A third party with no insurable interest

Which of the following types of policies pays a benefit if the insured goes blind, Universal life, AD & D, Endowment or Adjustable Life

AD & D

How long does coverage normally remain on a limited pay policy

Age 100

How long does the coverage normally remain in a limited pay life policy

Age 100

How can whole life insurance be described

An insurance and securities product

The investment gains from a Universal Life Policy usually go toward

Cash Value

which statement is true about a whole life policy, beneficiaries may be charged only with the consent of the premium payor, death benefits can usually de adjusted, cash value may be borrowed against, or premiums are flexible

Cash value may be borrowed against

Under an interest sensitive whole life policy what occurs

Cash values are determined by interest rates

What occurs under an interest sensitive whole life policy

Cash values are determined by interest rates

Which of the following features group term life policy enables individuals to leave the group and continue there insurance without providing evidence of insurability, owners rights clause, incontestable period, insuring agreement, or conversion privilege

Conversion privilege

A universal life policy is referred to as an unbundles life policy because the owner can see the interest rate earned, expense charges and what else

Cost of insurance

A universal policy is sometimes referred to as an unbundles Life Policy because the owner can see the interest earned, expense charges, and the_____

Cost of insurance

A ______ term life policy normally is used when covering an insureds mortgage balance

Decreasing

Credit Life Insurance is typically issued with which of the following types of coverage, Annual renewable term, decreasing term, individual whole life, or group term

Decreasing Term

What type of life insurance policy has a death benefit that adjusts periodically and is written for a specified amount of time

Decreasing Term

Which of the following are not considered automatic premium loan provisions, modified whole life, 20 pay life, decreasing term or endowment

Decreasing Term

A ___ term life policy is normally used when covering an insured's mortgage balance

Decreasing Term Life Policy

F need life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule, what kind of policy does F need

Decreasing Term Policy

Credit life insurance typically issues which of the following, annual renewable term, decreasing term, individual whole life, or group term

Decreasing term

P owns a $25,000.00 policy that pays face value if he lives to be 70 or to his beneficiaries if he dies before age 70 what policy does P own

Endowment at age 70

S is close to retirement and would like to purchase a policy that will yield greater gains than bonds but will still protect the principal with a minimum level risk, what product should S be advised to purchase

Equity Index Insurance

What is M.E.C or modified endowment contract

Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract

A universal life policy is sometimes referred to as a unbundled life policy because the owner can see the interest earned, cost of insurance, and what else

Expense charges

An adjustable life policy has the following characteristics except for which one adjustable premiums, adjustable premium payment period, combination of term and whole life insurance, or face amount can be adjusted using policy dividends

Face amount can be adjusted using policy dividends

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000.00 at the end of 20 years what policy is right for P

Family maintenance policy

Which is not required in a whole life policy, loan interest rate, guaranteed dividend table, premium, or cash value table

Guaranteed dividend table

Which of the following requires a policyowner to provide proof of insurability for an adjustable life policy, increased face amount, decrease face amount, increase premium paying period, or decrease premium payment

Increase face amount

An architecture firm would lose a lot of money in the event of the death of its project manager what policy type should the firm purchase for the project manager

Ke

K wants to purchase a renewable term insurance policy which term insurance is renewable

Level

D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium, what policy will D need

Level Term Policy

Which of the following is considered to be a Limited-Pay Life policy, 10 year renewable and convertible term, life paid up at age 70, straight whole life, or renewable term to age 100

Life paid up to age 70

Which of the following is considered to be a limited pay life policy 10 year renewable and convertible term, life paid up to age 70, straight whole life, or renewable term life age 100

Life paid up to age 70

Life insurance that covers an insureds whole life with level premiums paid over a limited time is called

Limited Pay life

J is issued a life insurance policy with a death benefit of $100,000.00, she pays $600.00 per year in premiums for the first 5 years , the premium then increases to $900.00 per year in the sixth year and remains level thereafter. The policy's death benefit also remains at $100,000.00 what is this type of life insurance

Modified Premium Life

J is issued a life insurance policy with death benefits of $100.000.00 she pays $600.00 per year in premiums the first 5 years and increases to $900.00 per year the following 6 years the death benefits remains at $100,000.00 what form of insurance is this

Modified Premium Life

Which of the following life products is not considered a interest sensitive, modified whole life, variable universal life, interest sensitive whole life or variable life

Modified Whole Life

All of the following require a FINRA security registration to sell except which one, variable life, modified whole life, universal variable life, or variable annuity

Modified whole life

Which of the following is not considered interest sensitive, modified whole life, variable universal life, interest sensitive whole life, or variable life

Modified whole life

Which of the following needs a satisfied adjustable life insurance need for level premiums, need for flexible premiums, need for flexible nonforfeiture options, or need for level death benefits

Need for flexible premiums

Whole Life Insurance policies are contractually guaranteed to provide all of the following except cash value that will ultimately replace the death benefit, nonforfeiture benefit options, premiums that remain fixed for the life of the policy, or partial withdrawal features beyond a surrender charge period

Partial withdrawal features beyond a surrender charge period

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provisions

Which does not follow information required to be a whole life policy , policy loan interest rate, policy guaranteed dividends table, policy premiums, or policy cash value table

Policy guaranteed dividend table

Which policy is not required to be included in a whole life policy, policies loan interest rate, policies guaranteed dividend table, policies premium, or policies cash value table

Policy's guaranteed dividend table

Who benefits in Investor-Originated Life Insurance of IOLI when the insured dies

Policyowner

Who benefits in investor originated life insurance when the insured dies

Policyowner

What characteristics consist in a Straight Life Policy

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

What is a characteristic of a straight life policy

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

What is a straight life policy's characteristics

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

Which statement is correct regarding the premium payment schedule for whole life policies, premiums are payable through the insured's lifetime or coverage lasts until death of the insured, premiums are payable foe a set period or coverage expires at the point, premiums are payable until age 65 or coverage lasts a lifetime, or a single premium is paid at time of application or coverage lasts until retirement

Premiums are payable through the insured's lifetime or coverage lasts until death of the insured

Which of the following types of permanent life insurance policies offers the highest initial cash value, single premium, limited pay, straight whole, or interest sensitive

Single premium

K is shopping for permanent life insurance what offers the most protection per dollar of annual premium, what policy is best fi for K

Straight life

T would like to be assured $10,00.00 is available in 10 years to replace a roof on his house what kind of $10,000.00 policy should T purchase

Ten Year Endowment

What type of policy of life insurance are credit policies issued as

Term

What kind of life insurance product covers children under their paten's policy

Term Rider

Q wants to purchase a policy that provides the greatest amount of protection for a temporary period, what policy is right for Q

Term life

Which insurance policy gives the greatest amount of coverage for a limited period of time

Term life

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 when

The cost

Whole life in referrers to as straight life, what does this stand for when using the phrase

The duration of premium payments

Whole life insurance is sometimes referred to as Straight Life what does the straight indicate when using this phrase

The duration of premium payments

Under a graded premium whole life policy what occurs

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

What occurs under a Renewable Term Policy

The renewal premium is calculated on the basis of the insured's attained age

What happen sunder a renewable term policy

The renewal premium is calculated on the basis of the insureds attained age

S age 40 wants to purchase a life insurance policy allowing for increases or decreases in coverage as his needs change which policy is best for S

Universal Life

K purchases a Life Insurance Policy in 1986 which pays 10% interest in the early years of the policy, twenty years after the purchase she receives a notice from the insurer stating the policy will soon terminate unless a much higher premium is paid because of falling interest rates, what is this type of policy known as

Universal Policy

When is the face amount paid under a Joint Life and Survivor policy?

Upon death of the last insured

A term life insurance policy means

Upon the insured's death during the term of the policy

A ____ Life policy offers the owner investment in products such as money maker funds, long term bonds and equities

Variable

To sell a ______ policy a producer is required to register with the financial industry regulatory authority

Variable

What policy below requires an agent to register with NASD before selling, variable life, credit life, universal life, or interest sensitive whole life

Variable Life

What life policy combines investment choices with a form of term coverage

Variable Universal

A life policy that contains a monthly mortality charge as well as a self directed investment choice is called

Variable Universal Life Policy

A _____ life policy combines investment choices with a form of term coverage

Variable universal

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

Varies according to the contract

At what point does a whole life insurance policy endow

When the cash value equals the death benefit

When id the face amount of a whole life policy paid

When the insured dies or a the policy's maturity date, which ever happens first

When is the face amount of a whole life policy paid

When the insured dies or at the policy's date whichever happens first

What type of insurance offers permanent life coverage with premiums that are payable for life

Whole Life

Which insurance offers permanent life coverage with premiums that are payable for life

Whole life

Y purchased $1000,000.00 worth of permanent life insurance protection on himself and $50,000.00 worth of 10 year term coverage for his wife on the same policy which policies did Y purchase

Whole life Policy and Other Insured Rider

K age 45 and his wife age 43 have three children and purchase a family policy that covers K's wife to age 65 all of the following will pay death benefits excepts which one, wife dies at 60, wife dies at 66, child dies at 15, or child dies at 18

Wife dies at age 66

A policy become a modified endowment contract when

when the policy will lose many of its tax advantages