Insurance License: Types of Life Policies
The LEAST expensive first-year premium is found in which of the following policies
Annually Renewable Term
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity certain
Which of the following is INCORRECT regarding a $100,000 20-year level term policy?
At the end of the 20 years, the policy's cash value will equal $100,000
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy
What characteristic makes whole life permanent protection?
Coverage until death or age 100
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
Variable Whole Life Insurance is based on what type of premium?
Level fixed
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal
What type of life insurance policies generates immediate cash value?
Single Premium
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following policies would be classified as a traditional level premium contract?
Straight Life
Which of the following would help prevent a universal life policy from lapsing?
Target premium
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return
Which of the following is TRUE regarding the premium in term policies
The premium is level for the term of the policy
What is another name for interest-sensitive whole life insurance?
Current assumption life
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20 year period. What type of policy is this?
Level term
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
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 option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
Which of the following has the right to convert the existing term coverage to permanent insurance?
Policyowner
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The type of investment
What is the purpose of establishing the target premium for a universal life policy?
To keep the policy in force
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
$50,000
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 amount
A Straight Life policy has what type of premium?
A level annual premium for the life of the insured
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of the renewal
Which of the following products provides income for a specified period of years or for life, and protects a person against outliving their money?
An annuity
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value
Which of the following terms best describes the coverage provided by term policies, as compared to any other form of protection?
Greatest
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
Which of the following best describes annually renewable term insurance?
It is level insurance
If an annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
Who bears all of the investment risk in a fixed annuity?
The insurance company
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
The insured may renew the policy for another 10 years, but at a higher premium rate
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance