insrance 5

"When level premium insurance is renewed, the premium amount rise to reflect the increased mortality risk of the insured's older age." What phrase best describes this approach to increasing premiums?

Step rate

Bob purchase a $50,000 5-year level term policy. All of the following statements about Bob's coverage are correct EXCEPT A) the policy provides a straight, level $50,000 of a coverage for 5 years B) if the insured dies at any time during the 5 years, his beneficiary will recieve the policy's face value C) if the insured dies beyond the specified 5 year, only the policy's cash value will be paid D) if the insured lives beyond the 5 years, the policy expires and no benefits are payable

`C) if the insured dies beyond the specified 5 year, only the policy's cash value will be paid

A policy covering 2 lives that only pays a death benefit when the second insured person dies is

a joint and last survivor policy

A policy that pays double or triple the face amount if death occurs during a specified period is

a multiple protection policy

The cash vaule of life insurance policies belong to which of the following? A) Policyowners B) Insured C) Insurer D) Beneficiary

A) Policyowners

Mrs. Williamson purchases a 5-year $50,000 level term policy with an option to renew. At the end of the 5-year term, she renews the policy. which of the following statements are CORRECT? A) The premium for the renewal period will be the same as the initial period B) The premium for the renewal period will be higher than the initial period C) The premium for the renewal period will be the same as the initail period, but a one-time service charge will be assrssed upon renewal D) The Premium for the renewal period will be lower than the initial period

B) The premium for the renewal period will be higher than the initial period

All of the following statements regarding term life insurance are correct EXCEPT? A) a 3-year renewable policy allows a term policyowners to renew the same coverage for another 3 years. B) a 3-year renewable policy allows a term policyowner to increase coverage for the next 3 years C) an option to convert provides that a term life insurance policy can be exchanged for a permanent one D) both the option to renew and the option to convert relieve the insured from furnishing evidence of insurability

B) a 3-year renewable policy allows a term policyowner to increase coverage for the next 3 years

Which of the following whole life insurance policies attempts to make insurance premiuns more manageable by offering lower premiums during the first few years following issue? A) Minimum deposit whole life B) Indexed whole life C) Modified whole life D) Indeterminate premium whole life

C) Modified whole life

which of the following statments regarding modified endowment contracts (MECs) is CORRECT? A) a 1988 revenue act, commonly know as TAMRA, greatly increased the popularity of MECs. B) Congress has granted the MEC the most favorable tax status among all life insurance policies C) To avoid being classified as an MEC, a life Insurance policy must satisy the "7-pay test" D) According to the "7-pay test," if the total amount s policyowner pays into a life contract during its first 7 years is less than the sum of the net level premiums that would have been payable to provide paid-up future benfits in 7 years, the policy is an MEC

C) To avoid being classified as an MEC, a life Insurance policy must satisy the "7-pay test"

Which of the following statments describing whole life insurance is CORRECT? A) The face amount of the policy gradually increase the longer the policy remains in force. B) The shorter the premium period, the slower the cash value will grow. C) Whole life insurance is designed to mature at age 100 D) The policy's cash value decreases each year the policy is force.

C) Whole life insurance is designed to mature at age 100

All of the following statments about term insurance are correct EXCEPT A) it pays a benfit only if the insured dies during a specified period B) level, decreasing , and increasing are basic forms of term insurance C) cash values build during the specified period D) it provides protection for a temporary period of time

C) cash values build during the specified period

All of the following statments regarding basic forms of whole life insurance are correct EXPECT A) generally, straight life premiums are payable, at least annually, for the duration of the insured's life B) the owner of a 30-pay life policy will owe no more premiums after the 30th year policy is in forced C) limited payment life provides protection only for the years during which premiiums are paid D) a single-premiun life policy is purchased with a large one-time only premium

C) limited payment life provides protection only for the years during which premiiums are paid

allo of the following statements about varisble insurance policies are correct EXCEPT A) sales presentations must be preceded or accompanied B) state laws protect consumers and promote meaningful C) materials used in selling variable policies must be approved by the state Office of Insurance Regulation D) Full and fair disclosure must be provided to prospective policyowners

C) materials used in selling variable policies must be approved by the state Office of Insurance Regulation

All of the following statements about variable insurance are correct EXCEPT A) they are considered insurance contracts B) sellers must hold a state insurance license C) they are not considered securities contracts D) sellers must hold a registered representative license from FINRA

C) they are not considered securities contracts

What type of policy would be best used when the need for protection declines from year to year?

Decreasing term

In contrast to traditional whole life insurance policies, with variable life insurance products

contract cash values are not guaranteed

Which of the following terms best describes a life insurance policy that provides a straight $100,000 of coverage for a period of time?

level term