Variable life & Annuities
With drawls from a variable universal life insurance policy are penalized if made before age
59 1/2
Mike wants to send his daughter to college. College costs are estimated to be $50,000 but Mike has only saved $10,000. The $40,000 difference is called the
Cost base The basic assumption need******* The deficit
All of the following help determine the maximum funding level except
Death benefit Insured's age Insured's gender Insured's hobbies*****
When comparing cash values between policies, policy owners should refer to the policies
Equivalent level annual dividend Life insurance surrender cost index Life insurance net payment cost index Settlement revenue dividend*****
What is the name for the writer that provides additional term insurance on the primary insured with guaranteed convertibility?
Additional insured rider******** Child insurance rider Primary insured rider Spousal insurance rider
A policy loan from a variable annuity is available at zero net cost beginning when?
At the first policy
An insurance contract must contain all of the following to be considered legally binding except
Beneficiaries consent*****
Which of the following is not a feature of a whole life policy?
Cash value Increasing premium Permanent protection Nonforfeiture values******
The cost recovery rule is also known as the
First in first out FIFO Seven pay test***** Viatical settlement Living benefits
The most common variations of whole life are
Private and government Modified premium and graded premium Flexible and fixed Fixed amount and fix period*******
Loading in premiums is meant to cover
Raising interest rates* Extended list of losses Commissions to agents at operating expenses Unpaid policy loans***********
Any variable second to die life insurance policy when are tax free survivor benefits payable?
After the death of the second party************ After the death of the first party* At any point after the fifth policy year At any point after the 10th policy year
What is the major advantage of being able to continue a life or health insurance policy by paying a past due premium during the grace period as opposed to having a policy reinstated?
An agents commissions are not collected A non-payment notice is not recorded to the insured's credit report Only a physician statement of continued good health is required***** Providing prayers of continued insurability is not required
The best definition of annuity unit is
In accounting measure which is created at the beginning of the annuity. And is used to determine the amount of future annuity payments A unit of ownership in the separate account which, when multiplied by the value of a unit, describes the account holders of value during the accumulation phase*********** In assumption of a reasonable rate of return on the investment in a separate account A unit used to express the value of fixed annuities only
And insured has a universal life policy and is curious as to when interest is credited from the cash value of the policy she consults with her agent. What does her agent tell her
Monthly*** Annually Weekly Daily
Judy is a 72-year-old retired nurse who is interested in taking out the new life insurance policy. What type of life insurance planning should Judy be concerned with?
Premature death planning Pre-retirement planning Estate planning Retirement planning*****
Which of the following best represents what is meant by life insurance creates an immediate estate?
The face value of the policy is payable to the beneficiary upon the death of the insured
And policy loans, which of the following serves as the collateral for the loan?
The fixed rate of return The interest rate Premium The cash value of the policy****
Who controls the amount and the frequency of the payment and a flexible premium policy?
The insured The insurer****** The agent The beneficiary
All of the following are the separate divisions of a universal contract except
The protection element The expense element**** The cash value element The annual account element
And insured has a universal life insurance policy that the ducks expense charges from premium payments. What type of universal life policy is this?
Deduction loaded Premium loaded***** Back loaded Front Loaded
A life insurance policy qualifies a modified endowment contract and he see if the policy would end up as a paid up policy before the end of
Three years Five years Seven years The life of the policy*******
The savings portion of variable life insurance policies are dependent upon
Fixed income investments The standard and poors index Mutual funds***** The Fitch ratings index
Which of the following choices best describes the black out.?
From the time when the youngest child reaches the age of 21 until the surviving spouse reaches the age of 70 1/2 From the time when the youngest child gets married until the surviving spouse retires From the time when the youngest child reaches the age of 16 until the surviving spouse reaches the age of 16 From the time when the youngest child leaves The house until the surviving spouse retires*********
What provision in an insurance policy extends coverage even if the premium has not been paid?
Grace period
Which of the following refers to the cost of the pier insurance coverage?
Gross premium************** Net premium** Horizon Consideration cost
Which of the following are not finding strategies of universal life insurance policies?
Investment funding and maximum funding Faulty funding and provisional funding Underfunding and parity funding****** Minimum funding and adequate funding
The premium charge by insurance companies for the feature that guarantees death benefit payment, even if a policy's investment account is nothing is there
Mortality risk Risk charge Initial premium**** Dividend deduction
How frequently may the asset allocation of the cash value of the variable whole life policy be changed?
Once a year***** Once every six months Once a quarter 12 times a yearn
Insurance contracts are unilateral which means
One party benefits from the contract There is one beneficiary Only one party makes a legally enforceable promise********* The contract is good for just one year
Which of the following is incorrect regarding whole life insurance?
Policy loans are tax-deductible Cash value exceeding the premiums paid is taxable***** Premiums are not tax-deductible Dividend interest is taxable
Based on human life value approach which of the following is not used to calculate an individual's life value?
Predicted needs of the family after the insured's death
One of the advantages of a variable annuity in comparison to a fix annuity is
Protection against inflation***** Guaranteed rate of return Reduction of investment risk Tax-deferred accumulation of earnings
Is an applicant submits the initial premium with an application, which action constitutes acceptance?
The applicant submit a statement of good health The producer delivers the policy The insurance company receives the application and initial premium The insurer approves the application*****
Who is the owner and beneficiary of a charitable adjustable life insurance policy?
The donors Both the donors in the nonprofit organization The nonprofit organization The owner and beneficiary have to be separate****
With adjustable life, the owner can change all of the following except
The length of time the coverage will last The mortality charge The death benefit The premium****
Mortality tables are statistical tables used by life insurance companies to help predict
The probability of diseases for specific groups of individuals Life expectancy and the death rates for specific groups of individuals******* Premium amounts in future years Unexpected losses
Assuming the premiums are paid, universal life policy remains in force
Through age of 59 1/2 or until the policy is 10 years old Through age70 or until the policy is five years old******** Do you age 72 or until the policy is two years old Do you age 75 onto the policy is one years old
An insured has a current assumption whole life policy that guarantees a competitive interest rate on the cash value of his account what is the longest number of years that the insured can expect this competitive rate to remain?
One year 10 Years 20 years Indefinitely*****
Which of the following best represents what is meant by life insurance create an immediate estate?
The face value of the policy is payable to the beneficiary upon the death of the insured******** The policy has cash values and nonforfeiture values The policy generates immediate cash value The death benefit will always be paid to be a state of the insured
The practice of replacing insurance policies for the sole purpose of making commissions is known as
Churning****** Miss representation Replacement Coercion
It's a single premium policy is surrendered within the first 5 to 10 years of coverage the policy owner will be charged a
Excess premium Back and fee Policy loan Rate of interest****
Who bears all of the rest of a single premium variable life insurance policy?
Underwriter Policyowner Beneficiary***** Agent
The gap between a policies cash value and the death benefit is the
Accumulation value****** Donut hole Retained premium Corridor
What is the name for the writer that provides additional term insurance for up to five family members?
Additional insured rider Child insurance rider***** Accelerated benefit rider Spousal insurance rider
The cash build up in a universal life insurance policy is taxed
When it is withdrawn
What is the required minimum amount of coverage on a variable universal life insurance policy?
$25,000 $50,000 $75,000***** $100,000
Which of the following is used to compute rates, dividends, and risk?
Warranty Actuarial tables Representation Contract law