Chapter 3 - Life Insurance Policies

Which of the following is called a "second-to-die" policy? A. Family Income B. Juvenile life C. Joint Life D. Survivorship

D. Survivorship

Which of the following is TRUE about credit life insurance? A. Creditor is the policy owner B. Debtor is the annuitant C. Creditor is the insured D. Debtor is the policy beneficiary

A. Creditor is the policy owner

To sell variable life insurance policies, an agent must receive all of the following EXCEPT? A. A life insurance license B. SEC registration C. FINRA registration D. A securities license

B. SEC Registration

All of the following entities regulate variable life policies EXCEPT A. The insurance department B. The Guaranty Association C. Federal Government D. The SEC

B. The Guaranty Association

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his receive from the policy? A. Nothing B. $50,000 C. $100,000 D. $200,000

C. $100,000

Which of the following is an example of a limited-pay policy? A Level Term Life B Straight Life C Life Paid-up at Age 65 D Renewable Term to Age 70

C Life Paid-up at Age 65

An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium? A. it will increase each year during the next 5 years as the face amount increases each year. B. It will increase because the insured will be 5 years older than when the policy was originally purchased. C. It will remain the same for the new 5-year term. D. It will decrease for the new 5-year term since the insured is now a lesser risk to the company.

B. It will increase because the insured will be 5 years older than when the policy was originally purchased.

The premium of a survivorship life policy compared with that of a joint life policy would be A. Half the amount B. Lower C. Higher D. As high

B. Lower

A Universal Life Insurance policy has two types of interest rates that are called A. Fixed and Variable B. Minimum and Target C. Guaranteed and Current D. Option A and Option B

C. Guaranteed and Current

Which of the following best describes annually renewable term insurance? A. Neither the premium nor the death benefit is affected by the insured's age B. It provides an annually increasing death benefit C. It is level term insurance D. It requires proof of insurability at each renewal

C. It is level term insurance

Which of the following is an example of limited pay life policy A Level Term Life B. Straight Life C. Life Paid-up at Age 65 D. Renewable Term to Age 70

C. Life Paid-up at Age 65

Which of the following would help prevent a universal life policy from lapsing? A. Adjustable premium B. Corridor of insurance C. Target Premium D. Face amount

C. Target Premium

In a group life insurance policy, the employer may select all of the following EXCEPT A. The amount of insurance B. The premium payor C. The beneficiary D. The type of insurance

C. The beneficiary

Which of the following is TRUE regarding the insurance amount in a credit life policy? A. Allowable amount of coverage is determined by the State Insurance Commissioner B. The amount of coverage is determined by the State Insurance Commissioner C. The creditor can only insure the debtor for the amount owed D. The creditor may insure the debtor for an unlimited amount of coverage

C. The creditor can only insure the debtor for the amount owed

Which of the following are generally NOT considered when underwriting group insurance? A. The group's past claim experience B. The size of the group C. The insured's medical history D. The nature of the group

C. The insured's medical history

Which statement is NOT true regarding a Straight Life policy? A. The face value of the policy is paid to the insured at age 100 B. It usually develops cash value by the end of the third policy year C. It has the lowest annual premium of the three types of Whole Life Policies D. Its premium steadily decreases over time in response to its growing cash value

D. Its premium steadily decreases over time in response to its growing cash value

What is the purpose of establishing the target premium for a universal life policy? A. To accumulate cash value faster B. To pay up the policy faster C. To cover all policy expenses D. To keep the policy in force

D. To keep the policy in force

Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be A. Determined by the health of the insured B. Based on the issue age of the insured C. Discounted D. Adjusted to the insured's age at the time of renewal

D. Adjusted to the insured's age at the time of renewal

A Straight Life policy has what type of premium? A. An increasing annual premium for the life of the insured B. A decreasing annual premium for the life of the insured C. A variable annual premium for the life of the insured D. A level annual premium for the life of the insured

D. A level annual premium for the life of the insured