Type of insurance policies
Credit life insurance is typically issued with which of the following types of coverage?
Decreasing Term
Additional coverage can be added to a Whole Life policy by adding a(n)
Decreasing term rider
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
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 at the end of that 20 year period. What type of policy should P purchase?
Family Maintenance Policy
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
A 15 year mortgage is best protected by what kind of life policy?
15 year decreasing term
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
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
The investment gains from a Universal Life Policy usually go toward
The cash value
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
A 42 year old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
Universal Life
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable Life
Variable Life products require a producer to
hold life insurance and security license
Which of the following types of policies pays a benefit if the insured goes blind?
✓ AD&D
Q is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period.
✓ Term Life
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
✓ Variable Universal Life
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called
Limited Pay Life
Which of these characteristics is consistent with a Straight Life policy?
Premiums are payable for as long as there is insurance coverage in force
Which of the following types of permanent life insurance policies offers the highest initial cash value?
Single Premium
Stranger - Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n)
Third-party with no insurable interest
If a 10 year term life policy contains a renewability provision, the policy will renew
Without evidence of insurability
What type of policy would offer a 40-year old the quickest accumulation of cash value?
20-pay life
Which of these is an element of a Variable Life policy?
A fixed, level premium
How long does the coverage normally remain on a limited pay life policy?
Age 100
When does the whole life insurance policy endows?
Cash value equals the death benefit
Which statement about a whole life policy is correct?
Cash value may be borrowed against
What kind of premium does a Whole Life policy have?
Level
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment Contract
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
Which of these life products is NOT considered interest-sensitive?
Modified Whole Life
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 Provision
Which of the following actions is NOT possible with a Universal Life policy?
Premiums may be applied as a credit against income tax
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
What type of life insurance are credit policies issued as?
Term
What advantage does the renewability feature give to a term policy?
The insured may extend the coverage period
Which of the following policies combines investment choices with a form of Term coverage?
Variable Universal Life
which statement is TRUE regarding a variable whole life policy?
a minimum guaranteed death benefit is provided
A variable insurance policy does not what?
does not guarantee a return on its investment account
Which of these needs is satisfied by adjustable life insurance?
insureds need for flexible premiums
The amount of coverage on a group credit life policy is limited to
the insured's total loan value
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
What kind of life insurance product covers children under their parent's policy?
Term rider
A life insurance policy that provides a policyowner with cash value along with a level face amount is called
Whole Life
All of these are characteristics of an Adjustable Life policy EXCEPT
face amount can be adjusted using policy dividends
Credit Life insurance is
issued in an amount not to exceed the amount of the loan
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
policyowner
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? Endowment with Extended Term Endowment with a Payor Benefit Who...
✓ Whole Life policy with an Other Insured Rider
Which of the following Life insurance policies combine term insurance with an investment element
✓ universal life
under a graded premium policy, the premiums:
Are lower during the polcies early years
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability?
Convertible Term
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?
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
Which of the following information is NOT required to be included in a Whole Life policy?
Policy guaranteed divident table
What is true concerning a Variable Universal Life policy?
Policyowner controls where the investment will go and selecets the amount of the premium payment
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term Life
Which of the following is considered an element of a Variable Life Policy?
Underlying equity investment
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
Which of the following Life Insurance policies combine term insurance with an investment element?
Universal Life
When is the face amount paid under a Joint Life and Survivor policy?
Upon death of the last insured
A(n) ______ Life policy offers the owner investment in products such as moneymarket funds, long-term bonds and equities.
Variable
Variable Whole Life Insurance can be described as
both an insurance and securities product
Under a Renewable Term policy,
the renewal premium is calculated on the basis of the insured's attained age
What term life policy is normally used when covering an insured's mortgage balance?
✓ decreasing
Term insurance has which of the following characteristics?
Expires at the end of the policy period
Which of these would be consider a Limited Pay Life policy?
Life Paid Up at Age 70
How does a typical Variable Life Policy investment account grow?
Through mutual funds, stocks, bonds
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as
Variable Life
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
Variable Life
Which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan?
Variable Universal Life
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
Whole Life
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?
10 year endowment
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 type of life policy covers 2 lives and pays the face amount after the first one dies?
Joint Life Policy
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
10 years
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face amount plus the policy's cash value
F needs 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 is needed?
Decreasing term policy
A universal life policy is sometimes referred to as an unbundled Life Policy b/c the owner can see the interest earned, cost of insurance, and the?
Expense Charges
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance Policy
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
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 death benefit
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
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing Term
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned and the
Cost of Insurance
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
Level Term
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
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for
Modified Whole Life
Which statement is correct regarding the premium payment schedule for whole life policies?
Premiums are payable throughout the insured's lifetime/coverage lasts until death of the insured
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
K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is know as an ________ life policy.
Universal Life Policy
A Limited - Pay Life Policy Has
premium payments limited to a specified number of years
A policy that becomes a Modified Endowment Contract (MEC)
will lose many of its tax advantages
When is the face amount of a Whole Life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
