Chapter 3 (Part 1)
Decreasing term policy
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?
10 years
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
Through mutual funds, stocks, bonds
How does a typical Variable Life Policy investment account grow?
Modified Whole Life
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?
$20,000 death benefit
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
Family Maintenance Policy
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Whole 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
What type of insurance offers permanent life coverage with premiums that are payable for life?
upon death of the last insured
When is the face amount paid under a Joint Life and Survivor policy?
Premiums are payable for as long as there is insurance coverage in force
Which of these characteristics is consistent with a Straight Life policy?
premium payments limited to a specified number of years
A Limited-Pay Life policy has
face amount can be adjusted using policy dividends
All of these are characteristics of an Adjustable Life policy EXCEPT
Modified Whole Life
All of these insurance products require a producer to have proper FINRA securities registration in order to sell them EXCEPT for
30 Pay Life
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?
Whole life policy with other insured rider
Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase?
Term life
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Decreasing term
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Policyowner controls where the investment will go and selects the amount of the premium payment
Which is true concerning a Variable Universal Life policy?
A fixed, level premium
Which of these is an element of a Variable Life policy?
Modified Whole Life
Which of these life products is NOT considered interest-sensitive?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
Which of these statements describe a Modified Endowment Contract (MEC)?
Variable Life
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Life Paid-Up at Age 70
Which of these would be considered a Limited-Pay Life policy?
Conversion
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Cash value may be borrowed against
Which statement about a whole life policy is correct?
Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured
Which statement is correct regarding the premium payment schedule for whole life policies?
Modified Endowment Contract
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Policyowner
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
