Chapter 2: Types of Life Policies
An individual purchased $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?
An annuity
a universal life insurance policy is best described as a/an
Annually Renewable term policy with a cash value account
Which of the following is a feature of a variable annuity
Benefit payment amounts are not guaranteed
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible term policy
What is another name for interest-sensitive whole life insurance?
Current assumption life
Which of the following in NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
An agent selling variable annuities must be registered with
FIRNA
Which policy component decreases in decreasing term insurance?
Face Amount
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
Immediate
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
Which of the following is true regarding the annuity period
It may last for the lifetime of the anniutant
Which of the following is true regarding the annuity period?
It may last for the lifetime of the annuitant
Which of the following is not true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint Life
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint life Policy
Which of the following is an example of a limited-pay life policy?
Life paid up to 65
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
Equity indexed annuity
Seek higher returns
Which two terms are associated directly with the way an annuity is funded?
Single Payment or Periodic Payments
an insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called
Single premium whole life
All of the following statements about equity indexed annuities are correct EXCEPT
The annuitant receives a fixed amount of return
Which of these is not true regarding Equity Indexed Annuities
The earn lower interest rates than fixed annuities
All of the following are true of an annuity owner EXCEPT
The owner must be the party to receive benefits
Which of the following products requires a securities license?
Variable annuity
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 20 years or until death, whichever occurs first
Which of the following is TRUE regarding variable annuities?
the annuitant assumes the risks on investment
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
the beneficiary
All of the following are true regarding the convertibility option under a term life insurance policy EXCEPT
upon conversion, the death benefit of the permanent policy will be reduced by 50%
In a survivorship life policy, when does the insurer pay the death benefit?
upon the last death