Chapter 1: Types of individual Life Insurance
The policy owner of a whole life insurance policy is also the insured. what age must the insured attain in order to receive the policies face amount
Age 10
Whole life policies provide protection until the insured reaches what age
Age 100
The death protection component of a universal life policy expressed as what type of coverage
Annually renewable term
In variable universal Life insurance to what policy component does the term variable refer
Cash value and death benefit
What happens to the cash value in a whole life insurance policy matures
Cash value is paid to the policyowner
An individual has just borrow $10,000 on a 5-year note from his bank the note is due in installments what type of life insurance policy would best suited to the situation
Decreasing term
What type of life insurance is best suited to cover a mortgage
Decreasing term
If an employee wants to join group life insurance coverage outside of the open enrollment. What would the employee have to provide
Evidence of insurability
When the amount of insurance is increased in an adjustable life policy what will the insurer require for the insured
Evidence of insurability
What is the main advantage of converting from group life insurance to individual coverage
Evidence of insurability is not required
What does level refer to in level term insurance
Face amount
What policy component must decrease in decreasing term insurance
Face amount
Under a 20 pay whole life policy in order for the policy to pay the death benefit to a beneficiary the premiums must be paid for what time period
For 20 years or until the insured's death, whichever occurs first.
What type of policy issues certificates of insurance to the insureds
Group Policy
What type of policy is typically issued without proof of insurance for an insured
Group policy
What are the characteristics of the groups that under rights will consider before issuing a group life policy
Groups purpose size financial strength and turnover
Universal life policies have two types of interest rates what are they
Guaranteed and current
A whole life policy that requires that the policy owner only pays premiums for a specific number of years is known as what kind of policy
Limited pay whole life
What type of life insurance policy is life paid up at age 65
Limited pay whole life
What are living benefits of whole life insurance
Loan values
What universal life option has a gradually increasing cash value in a level death benefit
Option A
What are the death benefit options in universal life policy
Option A level death benefit and option B increasing death benefit
What is the major difference between the most common types of whole life policies straight life limited payment and single premium
Premium payment mode
Whole life insurance policies mature when the insurer reaches the age of 100 if the owner of a whole life policy dies at age 80 and there are no outstanding loans on the policy what portion of the death benefit would be paid to the beneficiary
The full death benefit
In annually renewable term policies what is the annual premium based upon
The insured's attained age
Who is entitled to the cash flows in a life insurance policy
The policy owner
What happens to the premium an annually renewable term life policy
The premium increases with each renewal
How is the premiums determined in a joint life insurance policy
The premium is based on the average age of the insureds
Intern policies what happens to the premium throughout the time of the policy
The premium remains level
If an insurer terminates membership and group life insurance to what type of insurance can the insured convert the coverage
Whole life
Group life insurance policies are written as what type of insurance
annually renewable term
Who is insured under a juvenile life policy
minor
Regarding taxation how does the cash value of a universal life policy accumulate
tax deferred
What type of life insurance policy offers pure death protection
term
An insured receives a monthly summary for his life insurance policy he notices that the cash value of the policy is significantly lower this month than it was last month what type of policy does the insured have
variable
What type of life insurance policy provides permanent protection
whole life
A policy states that it will pay a specific face amount 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?
20-year level term
What type of premium is charge on a straight life policy
A level premium for the life of the insured
What type of whole life insurance policies only requires a payment of premium at its inception and in addition to providing insurance protection for the life of the insured endows at the insured's age 100
Single premium whole life
What type of whole life insurance policies only requires a payment of premium at its inception and in addition to providing insurance protection for the life of the insured endows at the insureds age 100
Single premium whole life
What elements of an adjustable life policy can be changed by the policyowners
The amount and payment period of the premium, the face amount, and the period for protection
Under option B in a universal life policy what happens to the death benefit
The death benefit increases each year by the amount of the cash value increases
Who owns a group life insurance contract
The employer (also known as the sponsor of the group)
Why are price loans not available on term insurance
There is no cash value to borrow against
What is the purpose of establishing the target premium for universal life policy
To prevent the policy from lapsing
Between adjustable life and universal life policies which one provides more flexibility to the policy owner
Universal Life
In what type of life insurance policies can the policy owner skip premium payments without the policy lapsing
Universal Life
In a joint life policy when is the death benefit paid
Upon the first death
When would a 20 pay whole life policy endow
When the insured reaches age 100
When does an adjustable life policy accumulate cash value
When the premiums paid are more than the cost of the policy
