Exam FX- Life Insurance Policies CH 3

Which of the following statements is correct regarding a whole life policy?

The policy owner is entitled to policy loans

Which of the following best defines target premium in a universal life policy?

The recommended amount to keep the policy is force throughout its lifetime

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment

If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A full death benefit

All of the following could own group life insurance EXCEPT:

A group needing low-cost life 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 is called a "Second-to-die" policy?

Survivorship life

What characteristic makes whole life permanent protection?

Coverage until death or age 100

Which of the following would help prevent a universal life policy from lapsing?

Target Premium

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

In a group life insurance policy, the employer may select all of the following EXCEPT:

The beneficiary

Which of the following statements about group life is correct?

The cost of coverage is based on the ratio of men and women in the group

An Adjustable Life policy owner can change which of the following policy features?

The coverage period

Which of the following is TRUE regarding the insurance amount in a credit life policy?

The creditor can only insure the debtor for the amount owed

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Limited pay whole life

The premium of a survivorship life policy compared with that of a joint life policy would be

Lower

Which Universal Life option has a gradually increasing value and a level death benefit?

Option A

Which option for universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

All of the following are characteristics of group life insurance EXCEPT?

Premiums are determined by the age, sex, and occupation of the entire group

If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection the insurer may

Require evidence of insurability

To sell variable life insurance policies, an agent must receive all of the following EXCEPT?

SEC Registration

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

An employee quits his job on MAY 15 and doesn't convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full death benefit from the group policy to the beneficiary

All of the following are true regarding a decreasing term policy EXCEPT:

The payable premium amount steadily declines throughout the duration of the contract

For variable products, Underlying assets must be kept in

A separate account

The LEAST expensive first-year premium is found in which of the following policies?

Annually renewable Term

An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his

Attained age

All of the following statements are correct regarding credit life insurance EXCEPT:

Benefits are paid to the borrower's beneficiary

Which of the following would be the beneficiary in credit life insurance?

Creditor

Which of the following is TRUE about credit life insurance?

Creditor is the policy owner

Which of the following is NOT allowed in credit life insurance

Creditor requiring that a debtor buys insurance from a certain insurer

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

Decreasing term

What does "Level" refer to in level term insurance

Face Amount

Which policy component decreases in decreasing term insurance?

Face Amount

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid

For 20 years or until death, whichever occurs first

When an employee terminates coverage under a group insurance policy, coverage continues in force

For 31 days

A universal life insurance policy has two types of interest rates that are called?

Guaranteed and Current

A return of Premium term life policy is written as what type of term coverage?

Increasing

The type of term insurance that provides increasing death benefits as the insured ages is called

Increasing Term

What are the two components of a universal policy?

Insurance and cash account

Which of the following best describes annually renewable term insurance?

It is level term insurance

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Joint Life

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

Variable Whole Life insurance is based on what type of premium

Level Fixed

Which of the following is NOT a type of whole life insurance?

Level Term

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

Those who have been insured under the plan for at least 5 years

Which of the following types of policies allows for a flexible premium and a variable investment component?

Variable Universal Life Insurance

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

Variable universal life

Which of the following types of policies will provide permanent protection?

Whole Life