Ch 10 Whole Life
If a 30-year old will live to age 99, which of the following policies will pay a death benefit and will have cost the lowest total premium outlay? a. 15-Pay Whole Life b. Straight Whole Life c. 30 Year Life d. Paid Up at 55 Whole Life
15 pay whole life If an Insured wants the lowest total premium outlay, the solution is to prepay the premiums as early as possible. The 15-Pay Whole Life policy (that is same as a Paid Up at 45 Whole Life policy) will do this for a 30-year old
A Limited-Pay Whole Life policy provides coverage until: a. The last premium is paid. b. Age 100.
Age 100
Which of the following would be a good policy for a new college graduate who expects her income to increase significantly over the next few years and will have student loans paid off soon? a. Graduated (Modified) Premium Life b. Straight Life c. Increasing Term d. Decreasing Term
Graduated (Modified) Premium Life The struggling recent college graduate would opt for the lowest premium in the early years and then have the payments increase as the graduate's earning increase. That is exactly what a Graded Premium life policy does. Watch out! A Graded Premium life policy is sometimes called a Modified Life policy.
Annie will be required to provide proof of insurability in each situation EXCEPT? a. When applying for Convertible Term Life. b. When applying for Renewable Term Life. c. When applying for Whole Life. d. When applying for a Group Life plan.
No proof of insurance is required for applying for a Group Life Plan
A policy owner who has a Convertible Term policy wishes to convert to Whole Life. Will proof of insurability be required? a. No. b. Yes.
No, we want to promote clients switching to whole life from Term, and making them provide the proof of insurance might result in pushing them away
Which of the following policies would have the lowest premium in the first year for a 40 year old? a. Straight Life b. 20-Pay Whole Life c. 15-Pay Whole Life d. Paid Up at 55 Whole Life
Straight Life
Which will protect a 30-year old to age 100 with the lowest annual premium? a. Straight Life b. 20-Pay Whole Life c. 10-Pay Whole Life d. 15-Pay Whole Life
Straight Life
Adam purchases a life policy at age 50 and lives to be 100. Which policy type will require the highest total premium outlay? a. Paid Up at 65 b. 20-Pay Life c. 10-Pay Life d. Straight Life
Straight Life Adam will pay the highest total premium outlay with a Straight Life policy because he will pay to age 100. The other policies will all be paid up at an earlier date and have more premium in the cash value account to grow to achieve the face value by age 100.
Which policy will have the lowest annual premium for a 40-year old applicant? a. 10-Pay Life b. 20-Pay Life c. Life Paid at 65 d. Straight Whole Life
Straight Whole Life The policy that requires payments over the longest period of time would have the lowest annual premium. The Insured must either pay a little bit each year to age 100 or pay more each year but make payments for fewer years. On the other hand, if it is paid up early, the annual payments will be higher. The Straight Whole Life policy requires the Insured to potentially pay to age 100 - thus it will have the lowest annual premium but will require the greatest total payment over the life of the policy.
Over the course of a Graded (Modified) Premium Whole Life policy: a. The premium remains level and fixed. b. The premium decreases. c. The death benefit decreases. d. The premium increases.
The Premium Increases
For which of the following clients would Single Premium Whole Life be most appropriate? a. The breadwinner in a young, growing family. b. A young person just graduating from school. c. An elderly poor person. d. A wealth older widower with a large estate to protect.
The Wealthy Older Widower with a large estate to protect
Alexa buys a 10-Pay Whole Life policy. Assuming she pays all her premiums, how long will she be covered? a. Until death or age 100. b. Until the end of the 10 year term.
Until Death or age 100
A policy loan is actually made: a. by the Insurance Company itself. b. from the policy's cash value.
by the Insurance Company itself
