Chap 3 Life Policy

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it?

Decreasing Term. The Automatic Premium Loan provision can be incorporated into all of these policies EXCEPT decreasing term.

F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?

Decreasing term policy. A life insurance policy written for a specified period of time with a death benefit that changes regularly according to a schedule is a decreasing term policy.

What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?

Family Maintenance Policy. A policy that provides an income for a specific period starting at the death of the insured is a Family Maintenance Policy.

Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death?

Joint Life. A joint life policy covers two or more people. Using some type of permanent insurance (as opposed to term), it pays the death benefit at the first insured's death.

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor Provision. A Payor Provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.

Which of the following actions is NOT possible with a Universal Life Policy?

Premiums may be applied as a credit against income tax. All of these actions are possible with a Universal Life policy EXCEPT "Premiums may be applied as a credit against income tax".

What type of life insurance are credit policies issued as?

Term. The type of insurance used is decreasing term, with the term matched to the length of the loan period (though usually limited to 10 years or less) and the decreasing insurance amount matched to the declining loan balance.

When is the face amount paid under a Joint Life and Survivor policy?

Upon death of the last insured. A Joint Life and Survivor policy pays benefits after the death of the last insured.

Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?

Variable Life. A life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable Life.

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

Whole Life. Whole Life insurance is designed to mature at age 100.

A life insurance policy that provides a policyowner with cash value along with a level face amount is called:

Whole Life. Whole life provides the insured with a cash value as well as a level face amount.

L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances?

L's spouse dies at age 66. L's spouse has coverage until age 65.

The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:

The cost. The cost of insurance is most important when an insured owner is trying to decide whether to convert term insurance at the insured's original age or the insured's attained age.

What type of life insurance incorporates flexible premiums and an adjustable death benefit?

Universal Life. Universal Life is designed to provide flexible premiums and an adjustable death benefit.