Types of Life Policies

The death protection component of Universal Life is always

Annually Renewable Term

A Universal Life Insurance policy is best described as a/an

Annually Renewable Term policy with a cash value account.

When an annuity is written, whose life expectancy is taken into account?

Annuitant

Which of the following is INCORRECT regarding $100,000 20-year level term policy?

At the end of 20 years, the policy's cash value will equal $100,000. (Term policy's do not develop cash values)

An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

What does "level" refer to in level term insurance?

Face amount

An insured purchased a life insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an

Interest-sensitive Whole Life

Which of the following best describes annually renewable term insurance?

It is level term insurance.

Which of the following is TRUE regarding the annuity period?

It may last for the lifetime of the annuitant.

Which of the following is NOT true regarding the accumulation period of an annuity?

It would not occur in a deferred annuity.

A policy will pay the death benefit 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?

Level term

Which of the following is an example of a limited-pay life policy?

Life Paid-up at age 65

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

Which of the following is called a "second-to-die" policy?

Survivorship life

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability.

Which of the following statements is correct regarding a whole life policy?

The policyowner is entitled to policy loans

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Universal Life - Option A

Which type of life insurance policy allows the policy owner to pay more or less than the planned premium?

Universal life

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT

Upon conversion, the death benefit of the permanent policy will be reduced by 50%