Types of life Policies
What is variable universal life insurance
(a securities version of the universal life insurance.)
If a person has life insurance through work how long do they have to convert to an individual policy without proof of insurability?
31 days
Under Option ___ the death benefit remains ______ while cash value gradually ___________ there by ________ the pure insurance and allowing for greater________ in the older years
A,Level, Increase, Lowering
What is the purest form of term insurance?
ART
What are the flexible premium Policies?
Adjustable life(term and perm) , Universal Life(Flexible premium , Indexed life( Tied to Equity index)
How are premiums determined in group life insurance?
Age, Sex, and occupation of the entire group
The simplest way to explain a universal life account is?
An Annually Renewable Term Policy with a cash value account
When can a policy owner skip paying a premium and not have their policy lapse in a Universal Life Policy?
As long as the policy contains sufficient cash value to cover the cost of insurance
What can you not do in an Adjustable Life Policy?
Change the type of investment
in Credit life who is the owner and the beneficiary of the policy ?
Creditor
What are examples of permanent risks?
Death and Taxes
What does level mean in level term insurance?
Death benefit stays level thought-out the term of the policy
Under Option B, at any point in time, the total death benefit will always be ______to the face amount of of the policy plus the current amount of cash value
Equal
What two features distinguish group insurance from individual ?
Evidence of insurability is usually not required Participants under the plan do not receive a policy because they do not own or control the policy
In a increasing term policy the face amount
Increases
In what situations is Joint Life used for?
Joint when there is a need for two or persons to be protected however the need for insureds is no longer present after the insureds die.
In a level term policy the premium is ________ l?
Level
Regardles of type of term insurance The premium is _________ throughout the term of the policy
Level
What are the 4 basic types of term insurance?
Level , Increasing , decreasing,ART
What are the 4 characteristics of whole life policy
Level Premium , death , benefit, Cash Value, living benefits
Why is survivor ship a life policy have lower premiums than a join life policy all things being equal?
Life Expectancy is longer so the insurance company takes on less risk. Less risk lower the insurance premiums. Higher the risk Higher the premiums
What type policy is issued to the sponsor of a group policy ?
Master Policy / Contract
In Universal Life Policies , since the premium can be adjusted, the insurance companies may give the policy Owner a choice to pay what two types of premiums?
Minimum - the amount needed to keep the policy in force for the current year(will make it ART) Target - amount to be paid in order to cover the cost of insurance keep the policy in force for lifetime
What are some causes of concern for a group underwriter?
Purpose of the group( other than insurance) Size of the group, Turnover of the group , financial strength of the group
Surviorship polices pay out on which death? Premiums are base on ______________
Second death only , joint avearge age
The federal government has declared that variable contracts are considered ___________ and are regulated by the SEC
Securities
To sell Variable life policies what type of license must you have?
Securities license
What are the 3 basic forms of whole life?
Straight life( continuous Payments) Limited pay( Limted pay period , Single premium( one payment)
Regarding Length of coverage, what category does term insurance fall under?
Temporary
Regarding the length of coverage, all life insurance policies fall into what 2 catergories
Temporary and permanent protection
Why is term insurance referred to as pure death insurance?
The only value it provides is insurance in the case of death
What is target premium in universal life polices?
The recommended amount to keep the policy in force throughout its lifetime
Is evidence of insurability required to enter a group life policy?
Usually it is not. If so, it is used to reduce adverse selection
What is the key feature in indexed whole life( equity indexed whole life) insurance
cash value is depended upon the performance of the equity index such as S&P 500,
each insured participant under the group plan is issued a________
certificate of insurance for evidence they have coverage
What are examples of temporary risks
Mortage , auto loans, children's education , paycheck protection
In a Decreasing Term policy the Face amount ______________
decreases
What's the conversion privilege in group life policies?
employee has theright to convert to an individual policy w/o proving insurability at standard rate, based on the attained age. has a period of 31 days
What is variable life insurance
level, fixed premium, investment based product
What is permanent insurance ?
life insurance policies that build cash value and remain in effect for the entirelife of the insured (or until age 100) as long as the premium is paid.
In what situations is Surviorship Life used for?
offset the liability of the estate tax
What is the Key feature in variable life insurance
permanent insurace with
Universal life insurance is also known by the generic name "flexible premium adjustable life" Why?
policyowner has the flexibility to increase amount of premium paid into the policy and later decrease it again. even skip paying the premium
what is credit insurance?
special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor.Credit life usually written as decreasing term
Who is the policy owner in credit life insurance
Creditor is the policy owner and beneficiary, the debtor is the insured
Agents selling variable life insurance products must be registered with
FINRA
Agents selling variable life products must be registered with ________
FINRA
Joint life policies pay out on which death?The premiums are based on a____________
First Death only,joint average age
What privileges do you have with and adjustable life policy?
Increasing or decreasing the premium, changing the premium -paying period , increasing or decreasing the face amount , changing the period of protection
Death benefit stays level thought-out the term of the policy
Increasing term
What decreases in a decreasing term policy? What remains level?
Only the face amount decreases. The premiums are level.
Universal Life has two death benefit options. What are they ?
Option A - Level death Benefit Option B - Increasing death benefit option
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon death of the insured?
Option B
Permanent coverage covers _______Risks? Temporary Coverage covers_______Risk
Permanent Temporary