Chapter Exam 1-Life Policies
What life insurance policies most likely contain a 'renewability feature'?
10 Year convertible Term
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?
10 years
A 15 -year mortgage is best protected by what kind of life policy?
15-year decreasing term
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
20-Pay Life accumulates cash value faster than Straight Life
N is a 40-year old applicant who would like to retire at age 7-. 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
What kind of life insurance product covers children under their parent's policies?
A term rider
Which of the following types of policies pays a benefit if the insured goes blind?
AD&D
Credit life insurance is typically issued with which of the following types of coverage?
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
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies?
Family Maintenance Policy
Someone who wants to purchase life insurance that pays a set monthly amount over a certain period of time to beneficiaries
Family Maintenance policy
Who has the option to renew a renewable term policy?
Insured
Which of these needs is satisfied by Adjustable Life insurance?
Insured's need for flexible premiums
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?
Level
Which of these would be considered a Limited-Pay Life policy?
Life Paid-Up at Age 70
Universal Life Insurance
Life insurance payment whose premium cost changes with the environment
Which of the following information is NOT required to be included in a Whole Life policy?
Policy's guaranteed dividend table
Concern with Variable Universal Life policy?
Policy-owner controls where the investment will go and selects the amount of the premium payment
Which of these characteristics is consistent with a straight life policy?
Premiums are payable for as long as there is insurance coverage in force.
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?
Renewable
which of the following types of permanent life insurance policies offers highest initial cash value?
Single Premium
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?
Ten-Year endowment
What type of life insurance gives the greatest amount of coverage for a limited period of time?
Term Life
What type of life insurance are credit policies issued as?
Term policies
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Universal Life
Which of the following Life insurance policies combine term insurance with an investment element?
Universal Life
When is the face amount of a Whole Life policy paid?
Upon death or blah blah blah
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Variable Life
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?
Variable Life
A(n) __________ __________ Life policy combines investment choices with a form of Term coverage
Variable Universal
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Variable Universal Life
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)
Variable Universal life policy
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable life
A life insurance policy that provides a policy-owner with cash value along with a level face amount is called:
Whole life
Under a Graded Premium policy, the premiums
are lower during the policy's early years
Additional coverage can be added to a whole life policy by adding a(n)
cash value may be borrowed against
Additional coverage can be added to a Whole Life policy by adding a(n):
decreasing term rider
Credit Life Insurance
is issued in any amount at the discretion of the applicant
Who benefits in investor-originated life insurance (IOLI) when the insured dies?
policy-owner
A Limited-Pay Life policy has
premium payments limited to a specified number of years
Straight Life insurance policies:
provide most protection per dollar of annual premium
The most important factor to consider when determining whether to convert term insurance at the insured's attained age or the insured's original age is:
the cost
Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n)
third-party with no insurable interest
When is the face amount paid under a joint life and survivor policy?
upon death of the last insured
A term life insurance policy matures:
upon the insured's death during the term of the policy
Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period
varies according to the contract