Chapter 4: Types of Life Insurance Policies Quiz

C. Decreasing term

1. When the insured purchased a new home he wanted to purchase a life insurance policy that would protect his family again losing the home should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be: A. Flexible term B. Level term C. Decreasing term D. Increasing term

B. Life paid-up at age 65

3. Which of the following is an example of a limited-pay life policy? A. Straight life B. Life paid-up at age 65 C. Renewable term to age 70 D. Endowment maturing at age 65

D. Require evidence of insurability

10. If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may: A. Extend the open enrollment period B. Require a higher premium C. Increase medical requirements on existing members D. Require evidence of insurability

C. Renews each year with an increased premium

2. An annually renewable term policy: A. Increases in premium based on the insured's health B. Maintains a level premium each year C. Renews each year with an increased premium D. Increases in coverage each year

C. Single premium whole life

4. An insurance policy that only requires a payment of premium at its inception and provides insurance protection for the life of the insured and endows at the insured's age 100, is called: A. Enhance whole life B. Graded premium whole life C. Single premium whole life D. Straight whole life

A. Remains constant over time

6. With a traditional whole life policy, the death benefit: A. Remains constant over time B. Increases over time C. Decreases over time D. Becomes pure death protection after 20 years

A. Master contract

7. In a single employer group plan, what is the name of a document that is issued to the employer? A. Master contract B. Certificate of insurance C. Certificate of authority D. Employer-insurer contract

B. Premium is based on the average age of the insureds

8. Which of the following is true regarding a joint life policy? A. It pays a death benefit after the last insured's death B. Premium is based on the average age of the insureds C. It is a form of group life insurance D. It is used to offset the liability of the estate tax upon the insured's death

D. 100

9. The insured is also the policyowner of a whole life policy. What age must the insured attain in order to receive the policy's face amount? A. 62 B. 70 1/2 C. 95 D. 100

D. The death benefit can be increased by providing evidence of insurability

5. An individual owns an adjustable life policy. Sometime in the future he wants to increase the death benefit. Which of the following statements is correct regarding this change? A. The death benefit cannot be increased B. The death benefit can only be increased when the policy has developed cash value. C. The death benefit can only be increased by exchanging the existing policy for a whole life. D. The death benefit can be increased by providing evidence of insurability