types of insurance policies

universal life

A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called

Variable Whole Life

A life insurance policy which contains cash values that vary according to its investment performance of stocks is called

Universal life

A partial surrender is allowed in which of the following life policies

Adjustable Life

A policyowner may change two policy features on what type of life insurance?

Flexible death benefit Fixed surrender value Flexible premiums Builds cash value Fixed surrender value

All of these are characteristics of a universal life insurance policy EXCEPT

Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans When a whole life policy is surrendered, income taxes may be owed

All of these statements concerning whole life insurance are false EXCEPT

Provide funds to help pay taxes

How are survivorship life insurance policies helpful in estate planning?

Universal Life policy

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

child term rider

Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this?

Equity index whole life

Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this?

universal life

Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Which type of life insurance policy is this?

variable life insurance

Select the appropriate response A securities license is required for a life insurance producer to sell

Pre-death distributions will become taxable

Under a Modified Endowment Contract, what are the likely tax consequences?

Policyowner may increase or decrease the premium payments Policyowner may increase or decrease the face amount Policyowner can contribute large sums of money Policyowner has the right to select the investment which will provide the greatest return Policyowner has the right to select the investment which will provide the greatest return

Variable life insurance and Universal life insurance are very similar. Which of these features are held exclusively by variable universal life insurance?

The face amount

What does the word "level" in Level Term describe?

Coverage is eliminated

What happens to the coverage under a children's term rider when that child reaches a certain specified age?

Death benefit

What is NOT subject to income taxation under a Modified Endowment Contract (MEC)?

The gap between the total death benefit and the policy's cash value

What is a corridor in relation to a Universal Life insurance policy?

Renewal

What is the automatic continuance of insurance coverage referred to as?

Last Survivor Life insurance

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?

term, whole, and universal life insurance

What types of life insurance are normally used for key employee indemnification?

Pre-death distributions are typically taxable

Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test?

Family whole insurance rider

Which of these riders will pay a death benefit if the insured's spouse dies?

A flexible premium schedule

Which policy feature makes a universal life policy different from a whole life policy?

Juvenile insurance

Which type of life insurance is normally associated with a Payor Benefit rider?

Variable universal policy

Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?

Endowment policy

Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?

Variable universal life policy

Which type of policy combines the flexibility of a universal life policy with investment choices?