types of life insurance policies
what is the difference between single premium and a flexible premium payment options in a deferred annuity
the number of payments that purchase the annuity
Whose life expectancy is taken into consideration in an annuity contract?
Annuitant
who receives income payments from an annuity
Annuitant
What policy component must decrease in decreasing term insurance?
Face amount
how long will a life annuity with a 15 year period certain pay
For the life of the annuitant unless he/she dies within the first 15 years of the annuitization period; then the payments will last for 15 years
what are the death benefit options in universal life policies
Option A - level death benefit, and Option B - increasing death benefit
what type of life insurance offers an applicant a cash value element
Permanent insurance (usually, whole life)
Who is entitled to the cash values in a life insurance policy?
Policyowner
what type of whole life insurance policy generates immediate cash value
Single premium whole life
in annually renewable term policies, what is the annual premium based upon
The insured's attained age
what happens to the premium in an annually renewable term life policy
The premium increases with each renewal
How is the premium determined in a joint life insurance policy?
The premium is based on the average age of the insureds
what is the main reason for purchasing an annuity
To provide income that the annuitant cannot outlive
in a joint life policy, when is death benefit paid
Upon the first death
what type of annuity requires an agent to have a securities license
Variable annuity
when would a 20 pay whole life policy endow
When the insured reaches age 100
when does an adjustable life policy accumulate cash value
When the premiums paid are more than the cost of the policy
who bears the investment risk in a fixed annuity
insurer
During partial withdrawal from a universal life policy, which portion will be taxed?
interest earned on the withdraw and cash value
During partial withdrawal from a universal life policy, which portion will be taxed?
interests earned on the withdrawn cash value
what is the purpose of establishing the target premium for a universal life policy
to prevent the policy from lapsing
in what type of life insurance policies can the policyowner skip premium payments without the policy lapsing
universal life
Mortality tables are used by insurance companies to predict what?
Life expectancy and the death rates for specific groups of individuals
How soon can income payments begin in an immediate annuity?
No later than 1 year from the time of annuity purchase
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
joint life annuity
An annuity purchased with multiple payments that begins income payments after one year from the moment of purchase is known as what type of annuity?
a flexible premium deferred annuity
what type of license(s) is/are required to sell variable annuities
a life insurance and a securities license
what are the 2 phases of an annuity
accumulation and annuitization (or pay in and pay out)
what type of life insurance is best suited to cover a mortgage
Decreasing term
in an annuity, the accumulated money is converted into a stream of income during which phase
annuitization period
if the annuitant dies before the annuitization period starts, what will the beneficiary receive
either the amount paid into the annuity or the cash value whichever is greater
Can a business or a corporation be an annuitant?
No, an annuitant must always be a natural person
an individual has a contract that will provide hil with a certain amount of income for the rest of his life. however, this is not a life insurance police. what type of contract does this person have
annuity
what type of annuity credits its interest based upon an index such as S &P 500
equity indexed annuity
what does the term level refer to in level term insurance
face amount
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 what time period
for 20 years or until the insureds death, whichever occurs first
what type of life insurance policy provides permanent protection
whole life
if there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid
annuitants estate
what elements of an adjustable life policy can be changed by the policyowner
the amount of payment period of the premium, the face amount, and the period for protection
The death protection component of a universal life policy is expressed as what type of coverage?
annually renewable term
the death protection component of a universal life policy is expressed as what type of coverage
annually renewable term
what happens to the cash value when a whole life insurance policy matures
Cash value is paid to the policy owner
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 what time period
for 20 years or until the insured's death whichever occurs first
what are the 2 classifications of annuities according to the time when annuity payments begin
immediate and deferred
what type of insurance would perform the function of cash accumulation
whole life insurance
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?
life income with period certain
what type of whole life insurance policies only requires a payment of premium at its inception and in addition to providing insurance protection for the life of the insurer, endows at the insured's age 100
single premium whole life
what type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives
straight life
with a single premium deferred annuity when will the annuity payments become available
no sooner than 1 year after the annuity purchase
What universal life option has a gradually increasing cash value and a level death benefit?
option A
A policy states that it will pay a specified face amount if the insured dies during the 20 year premium-paying period and nothing if death occurs after the 20 year period. What type of policy is this?
20 year level term
a policy states that it will pay a specified face amount if the insured dies during the 20 year premium paying period and nothing if death occurs after the 20 year period. what type of policy is this
20 year level term
what type of premium is charged on a straight life policy
A level premium for the life of the insured
in flexible premium payment annuities, the term flexible refers to what
Amount of premium
if the annuitant dies during the accumulation period, who will receive the annuity benefits
beneficiary
in variable universal life insurance, to what policy component does the term variable refers
cash value and death benefit
an individual has just borrowed $10,000 on a 5 year note from his bank. the note is due in installments. what type of life insurance policy would be best suited to this situation
decreasing term
what type of life insurance policy offers pure death protection
term
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
the annuitant receives payments from the annuity during the annuitization period, the beneficiary receives benefits after the annuitants death
whole life insurance policies mature when the insured reaches the age of 100. if the owner of a whole life policy (the insured) dies at age 80 and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary
the full death benefit
an individual has a contract that will provide him with a certain amount of income for the rest of his life. however, this is not a life insurance policy. what type of contract does this person have
annuity
regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity
the annuitant receives payment from the annuity during the annuitization period, the beneficiary receives benefits after the annuitants death
what type of life insurance policy is life paid up at age 65
Limited pay whole life
Under Option B in a universal life policy, what happens to the death benefit?
Under Option B, the death benefit increases each year by the amount of the cash value increases
Why are policy loans not available on term insurance?
There is no cash value to borrow against
whole life policies provide protection until the insured reaches what age
Age 100
a whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy
limited pay whole life
what type of annuity can be purchased with a single premium
Immediate annuity