Type of Insurance Policies
which of these is an element of a variable life policy? -a fixed, level premium -insurer assumes the investment risk -no investment risk to the policyowner -rate of returns are guaranteed
a fixed, level premium
which statement is TRUE regarding a variable whole life policy? -a minimum guaranteed death benefit is provided -it is a combination of an endowment and a increasing term policy -its premiums and benefits are variable -it has guaranteed dividends
a minimum guaranteed death benefit is provided
a whole life insurance policy endows when the: -premium paid equals the death benefit -death proceeds are paid -cash value equals the death benefit -cash value plus dividends equal the death benefit
cash value equals the death benefit
a variable insurance policy: -guarantees a minimum rate of return -does not allow the policyowner to assume the investment risk -does not guarantee a return on its investment account -does not guarantee an assignment provision
does not guarantee a return on its investment accounts
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 -endowment -graded whole life policy -return of premium policy
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 benefit policy -family maintenance policy -family income policy -family survivor policy
family maintenance policy
variable life products require a producer to: -guarantee not more than a 12% return per annum -hold a life and health insurance license -hold a life insurance license and a securities license -be regulated solely by state law
hold a life insurance license and a securities license
credit life insurance is: -issued in any amount at the discretion of the applicant -used in the event of loss of income -issued in an amount not to exceed the amount of the loan -coverage that waives the premiums on a loan payment in the event of total disability
issued in an amount not to exceed the amount of the loan
which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? -survivorship life -family plan -joint life -whole life and level term rider
joint life
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for: -variable life -modified whole life -universal variable life -variable annuity
modified whole life
Which of these life products is NOT considered interest-sensitive? -modified whole life -variable universal life -interest sensitive whole life -variable life
modified whole life
whole life insurance policies are contractually guaranteed to provide each 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 -partial withdrawal features beyond a surrender charge period
partial withdrawal features beyond a surrender charge period
which of the following characteristics is CORRECT about interest sensitive whole life? -there is a flexible premium payment -there are no guaranteed minimum interest rates -mortality charges do no impact the investment amount -interest rates determine cash values
there is a flexible premium payment
What type of life insurance incorporates flexible premiums and an adjustable death benefit? -endowment policy -modified whole life -decreasing term -universal life
universal life
which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors? -universal life -endowment life -modified whole life -graded premium whole life
universal life
A(n) ____ life policy offers the owner investments in products such as money-market funds, long-term bonds and equity. -adjustable -term -universal -variable
variable
a life insurance policy that provides a policyowner with cash value along with a level face amount is called: -whole life -level term -credit life -ordinary life
whole life
