Chapter: Types of Life Policies
A straight life policy has what type of premium?
A level annual premium for the life of the insured
An Individual has just borrowed $10,000 from his bank on a 5- year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
Decreasing term
Which of the following best describes annually renewable term insurance?
It is level term insurance
Which Universal Life option has a gradually increasing cash value and a level death benefit
Option A
All the following are true regarding a decreasing term policy EXCEPT?
The payable premium amount steadily declines throughout the duration of the contract
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities
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
In a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Which of the following products will protect an individual from outliving his or her money?
Annuity
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What king of policy is it?
Limited-pay Life
If an agent wishes to sell variable life policies, what license must the agent obtain?
Securities
A domestic insurer issuing variable contracts must establish one or more
Separate Accounts
Which type of life insurance policy generates immediate cash value?
Single Premium
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
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
Variable life insurance is based on what kind of premium?
Level Fixed
Equity indexed annuities
Seek higher returns
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant
An insured buys a 5- year level premium term policy with a face amount of $10,000. The policy also contains renew ability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase b/c the insured will be 5 years older then when the policy was originally purchased
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
The equity in an equity index annuity is linked to....
An index like Standard & Poor's 500
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest
A man purchased a $90,000 annuity with a single premium and began receiving payments 2 months after that. What type of annuity is it?
Immediate
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
A return of premium term life policy is written as what type of term coverage?
Increasing
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases.
All the following statements about equity index annuities are correct EXCEPT ...
The annuitant receives a fixed amount of return
Which of the following is another term for the accumulation period of an annuity?
Pay-in period
Fixed annuities provide all the following EXCEPT ...
Hedge against inflation
