flash cards: types of insurance policies
what are the two phases of an annuity
Accumulation and annuitization (or pay-in and pay-out)
The death protection component of a universal life policy is expressed as what type of coverage?
annually renewable term
In variable universal life insurance, to what policy component does the term "variable" refer?
cash value and death benefit
an individual just borrowed $10,000 on a 5-year note from his bank. what type of insurance is best suited for this situation
decreasing term
what type of annuity credits its interest based upon the s&p 500 index
equity index annuity
How long will a life annuity with a 15-year period certain pay?
for the life of the annuitant unless they die within the first 15 years of the annuity period, then the payments last for 15 years
what are the two classifications of annuities according to the time the annuity payments begin
immediate or deferred
who bears the investment risk in a fixed annuity
insurer
During partial withdrawal from a universal life policy, which portion will be taxed?
interest earned on the cash withdrawn
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
joint life annuity
Mortality tables are used by insurance companies to predict what?
life expectancy and death rates for specific groups of individuals
What annuity settlement option provides income payments to the annuitant for the duration of his or her life, and also guarantees payment for a specified number of years?
life income with period certain
what type of license is required to sell variable annuity contracts
life insurance license and securities license
what type of life insurance policy is life-paid up at 65
limited-pay whole life
How soon can income payments begin in an immediate annuity?
no later than 1 year from the time the annuity was purchased
With a single premium deferred annuity, when will the annuity payments become available?
no sooner than one year after the annuity purchase
Can a business or a corporation be an annuitant?
no, must be natural person
what universal life policy has gradually increases cash value and a level death benefit
option A, option B death benefit increases with cash value
what components can be changed by the policyowner in an universal life policy
premiums, face amount, period for protection
What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured's age 100?
single premium whole life
what type of annuity is suitable for someone who wants to select the benefit option tht will pay them the most for the largest amount of time for the annuitant
straight life
what type of life insurance policy provides pure death protection
term
what is the difference between a single premium and a flexible premium payment options in a deferred annuity
the number of payments that purchased the annuity
what is the purpose for establishing target premiums in universal life policies
to prevent policy for lapsing
what is the main reason for purchasing an annutiy
to provide income that the annuitant cannot outlive
Under Option B in a universal life policy, what happens to the death benefit?
under option B, the death benefit increases each year as the cash value increases
What type of annuity requires an agent to have a securities license?
variable annuity
When does an adjustable life policy accumulate cash value?
when the premiums paid are more than the cost of the policy
what type of insurance would perform the function of cash accumulation
whole life insurance
