Life insurance

annually renewable term policy with a cash value account

A Universal Life Insurance policy is best described as a/an -annually renewable term policy with a cash value account -variable life with the cash value -Whole life policy with two premiums: target and minimum -flexible, premium variable life policy

required a premium increase each renewal

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..

Family protection policy Dash there is only one policy fee because they are all covered under one single policy

A young father would like a life insurance policy to provide coverage for all five family members at the lowest cost. Which type of policy would he most likely buy?

Guaranteed surrender value

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?

decreasing term- policys face amount decreases as face amount of debt is reduced

An individual had 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?

a qualified plan for a small business

If a company has a simplified employee pension plan, what type of plant is it?

It is a percentage of the cash value and decreases over time

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

May be converted to permanent insurance for the children without requiring evidence of insurability

One of the advantages of a family life insurance policy that provides coverage for children is that it

Annuitization period

The accumulated money is converted into a stream of income during which period

guaranteed and current

Universal life policies have two types of interest rates. What are they?

level fixed

Variable whole life insurance is based on what type of premium

universal life

What kind of policy allows withdrawals or partial surrenders?

modified life- attracts young professionals that cant afford premium as expensive right away

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?

interest rate index

determines interest rates on variable products

interest

during partial withdrawal from a universal life policy, which portion will be taxed?

a surrender charge is imposed

if a deferred annuity is surrendered prematurely

premium + interest - surrender charge= value of annuity

surrender charge

Life income with period certain

the form of life annuity, which pays benefits throughout the lifetime of the annuitant, and also guarantees payment for a minimum number of years is called

Aleatory Contract

unequal amounts are exchanged between payments and benefits. The insured receives a large benefit for a small price.

Payor Benefit- if the payor becomes disabled for at least six months or dies, the insurer will waive the premiums until the minor reaches a certain age like 21

what allows the insurer to relieve a minor insured from premium payments of the minors parents have died or become disabled?

face amount

what does level refer to in level term insurance?

The death benefit can be increased by providing evidence of insurability

what does a policy owner of an adjustable life policy have to do to increase the death benefit

Variable whole life has a guarantee death benefit

what is a key distinction between variable whole life and variable universal life products?

At the end of 20 years, the policies cash value will equal $100,000

what is incorrect regarding a $100,000 20 year level term policy

Fixed Premium

what is not a characteristic of universal life insurance?

Universal life - option A

what policy has an IRS required corridor or gap between the cash value and the death benefit?

flexible

what type of premium do both universal life and variable universal life policies have?

insurers guaranteed minimum rate of interest

what ultimately determines the interest rates paid to the owner of a fixed annuity?

creating an estate

what would not be an appropriate use of a deferred annuity?

an endowment policy-cash value in an endowment has to build up faster since the funds are intended to be used while the insured is alive, more expensive premium

your customer doesn't mind paying a higher premium as long as he gets life insurance product that would allow for a faster growth of the cash value. What kind of policy would you recommend?

Death Benefit

which component increases in the increasing term insurance

they offer guaranteed stock performance

which of the following is not a characteristic of variable annuities? -they contract owner bears the investment risk -benefits are dependent on the performance of securities -the cash value is adjusted for inflation -they offer guaranteed stock performance

variable universal life

which of the following life insurance policies allows a policyowner to take out a loan from the policys cash value? -increasing term life -credit term life -decreasing term life -variable universal life