Chapter 3 Exam 1 - Life Policies
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase?
30 Pay Life
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Conversion
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the
Cost of insurance
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Decreasing term
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
Level term
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term Life
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as
Variable Life
Which of the following policies combines investment choices with a form of Term coverage?
Variable Universal Life
When is the face amount of a Whole Life policy paid?
When the insured dies or at the policy's maturity date, whichever happens first
A life insurance policy that provides a policyowner with cash value along with a level face amount is called
Whole life
Variable Whole Life Insurance can be described as
both an insurance and securities product
When is the face amount paid under a Joint Life and Survivor policy?
upon death of the last insured
What type of life policy covers 2 lives and pays the face amount after the first one dies?
Joint Life Policy
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
Modified Endowment Contract (MEC)
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this?
Modified Whole Life
Which of these life products is NOT considered interest-sensitive?
Modified Whole Life
When applied to Whole Life insurance, the word "straight" denotes
The duration of premium payments
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
Additional coverage can be added to a Whole Life policy by adding a(n)
decreasing term rider