Exam FX Types of Life Policies
Annuitant
When an annuity is written, whose life expectancy is taken into account?
Option A
Which Universal life option has a gradually increasing cash value and a level death benefit?
The recommended amount to keep the policy throughout its lifetime
Which of the following best defines target premium in a universal life policy?
Upon conversion, the death benefit of the permanent policy will be reduced by 50%
All of the following are True regarding the convertibility option under a term life insurance policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
All of the following are true regarding a decreasing term policy Except
Equity Indexed Annuity
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would like to purchase a(n)
$100,000
An individual purchased a $100,000 Joint life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
Joint Life
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?
When the insured reaches age 100
When would a 20-pay whole life policy endow?
The annuitant assumes the risks on investment
Which of the following is TRUE regarding variable annuities?
Life Paid-up at Age 65
Which of the following is an example of a limited-pay life policy?
Survivorship life
Which of the following is called a "second-to-die" policy?
Whole Life policy
are reffered to as permanent protection, since as long as the premium is paid coverage will continue for the life of the insured. Both the premiums and death benefit are guaranteed and will remain level for life.
Under Option A
the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and death benefit before the policy matures.
Whole Life
Which of the following types of policies will provide permanent protection ?
Joint Life policy
covering two lives would be the least expensive because the premiums are based on an average age, and it would pay a death benefit only at the first death.
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Interest
During partial withdrawal from a universal life policy, which portion will be taxed?
Equity Indexed Annuities
are tied to the Standard and Poor's Index.
The Annuitant
Receives payments from an annuity and is the person whose life expectancy is considered when writing the contract. The annuitant and annuity owner are often the same person but do not have to be.
