Chapter 4 Quiz

which of the following features of the indexed whole life policy is NOT fixed?

cash value growth

what kind of policy issues certificates of insurance to insureds?

group insurance

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.

which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

universal life - option a

what is true about a decreasing term policy?

a decreasing term policy's face amount decreases as the amount of debt is reduced

what are the different classes of insurance?

term, whole life, universal and variable

which of the following types of insurance covers the whole family in a single contract?

family policy

variable whole life insurance is based on what type of premium?

level fixed

which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?

payor benefit

which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value?

variable universal life

which of the following is TRUE about credit life insurance?

creditor is the policyowner

which of the following types of insurance policies is most commonly used in credit life insurance?

decreasing term

which statement is NOT true regarding a straight life policy?

its premium steadily decreases over time, in response to its growing cash value

explain the difference between joint and survivorship insurance

joint pays out only after the first death, survivorship pays out only after the second death

if a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

jumping juvenile policy

what are the 3 basic types of term life insurance?

level, increasing, and decreasing

what types of licenses do you need to sell variable products?

life insurance producer license and securities license

which of the following is called a "second-to-die" policy?

survivorship life

what type of premium do both universal life and variable universal life policies have?

flexible

one of the advantages of a family life insurance policy that provides coverage for children is that it:

may be converted to permanent insurance for the children without requiring evidence of insurability

the policyowner of an adjustable life policy wants to increase the death benefit. which of the following statements is correct regarding this change?

the death benefit can be increased by providing evidence of insurability

when would a whole life insurance policy mature?

when the insured dies or turns 100, whichever is sooner