Life Insurance Chapter

What is developed in an effort to provide the policy owner with the best of both worlds

Adjustable life

The insurance component of universal life policy is always what term

Annually renewable

When does endowment mature

Before 100

What happens to the CV in limited pay policy

Builds up faster

Created by the accumulation of premiums and scheduled to equal the face amount of the policy when the insured reaches 100

Cash value

Provision provides the policy owner with the right to covert the policy to permanent insurability policy without evidence of insurability

Convertible

Another name for interest sensitive whole life

Current assumption life

Universal Option B

DB includes annual increase in CV so the benefit increases each year

In the case of converting from a whole life policy to a term policy, the insured may adjust what

Death benefit

Level premium and a death benefit that decreases every year is which term policy

Decreasing

What insurance would be best to insure payment of a mortgage or other debts

Decreasing term

Which insurance is not renewable since the death benefit is $0 at the end

Decreasing term

Cash value in what policy has to build up faster since the funds are intended to use while the insured is alive

Endowment

Policy that provides a permanent level, death protection if the insured should die prematurely, and they accumulate cash value

Endowment

Agent selling variable life insurance must be registered with what

FINRA

Life insurance or annuities are contracts that offer guaranteed minimum or fixed benefits that are stated in the contract

Fixed

Somewhat similar to modified life WL in that premiums they start out low and then level off at a point in the future

Graded premium

This whole life starts with a premium that approximately 50% or lower than the premium of a straight life policy

Graded whole life

A Indeterminate premium rate that level premium stated in contract

Guaranteed

Indeterminate premium has, which two premium rates

Guaranteed and nonguaranteed

Why would the annual premium be higher for limited pay whole life then straight life

Has shorter premiums

In index whole life, if the policy owner assumes the risk what happens to premium

Increases with the face amount

This term is usually used by insurance to fund certain riders that provide a refund of premiums or a gradual increase

Increasing

What term policy would be ideal to handle inflation and the increasing cost of living

Increasing

Level premium and a death benefit that increases each year

Increasing term

This whole life policy has the premium rate that may vary from year to year

Indeterminate premium

Main feature of this whole life insurance is that the cash value is dependent on the performance of the equity index such as SP 500 although no guarantee minimum interest rate

Indexed whole life

This policies face amount increases annually to keep pace with inflation as the consumer price index increases

Indexed whole life

Universal life policy has two components. What are they?

Insurance component, and cash account

A whole life policy that provides a guaranteed death benefit to age 100

Interest sensitive

This whole life, the insurer set the initial premium based on current assumptions about risk interest and expense

Interest sensitive

Universal life is also a what

Interest sensitive policy

Whole life policy that provides for a minimum guaranteed interest rate

Interest sensitive whole life

Premium rates on a what policy determined by averaging the age of both insured

Joint life

Most common term the death benefit does not change

Level

Level death benefit and level premium during policy is which term

Level premium

The permanent for whole life policies is based on the issued age. Remains in same throughout the life of the policy

Level premium

Term Insurance

Life insurance coverage for a specified period of time, less expensive than whole

These policies cover certain expenses from specifically named illnesses, injuries, or circumstances

Limited benefit

Which whole life is designed to be completely paid up before 100

Limited pay

The policy-owner can borrow against the cash value while the policy is in effect or can receive the CV when the policy is surrendered

Living benefits

What are the two premiums in adjustable life?

Minimum premium and target

This type of whole life policy charges a lower premium usually first 3 to 5 years, then a higher level premium for the remainder insured life

Modified life

If a policy offers pure death protection, what does this mean? What does this reveal about the cash value of the policy?

No cash value

A indeterminate premium rate is lower premium rate than the policy owner actually pays for a set period time

Non-guaranteed

Under the pure death protection of the policy is canceled or expires prior to the insured death what happens

Nothing is payable and no cash value

Life insurance is a general term used to refers to various forms of life insurance policies that build cash value and remain in effect for entire life of the insured

Permanent

Under the pure death protection if the insured dies during the term what happens

Policy pays the death benefit to the beneficiary

Term is also called what

Pure life

In index whole life, if the insurer assumes the risk what happens to the premium

Remains level

Provision that allows the policy owner the right to renew the coverage at the expiration date without evidence of insurability

Renewable

Life Insurance is a increasing term that pays an additional death benefits to the beneficiary equal to the amount of premiums paid

Return of policy

The federal government declared that variable contracts are what

Securities

Designed to provide a level death benefit to the insured age 100 for a one time lump sum payment. Paid up in one premium and accumulates immediate CV

Single premium WL

Basic whole life policy that policy owner pays the premium from time the policy is issued until the insured death or age 100

Straight

Most common Whole life that has the lowest annual premium

Straight

The 3 basic forms of Whole life are

Straight, limited pay and single premium

For young professionals that just started their practices and have not reached their earnings potential need which insurance

Term

The premium is level just the death benefit will fluctuate

Term

What insurance has no cash value

Term

What policy provide the greatest amount of coverage for the lowest premium

Term

What writer allows for additional amount of temporary entrance to be provided on insured without the need to issue another policy

Term

Insurance policy that allows the policy owner to skip a premium and not lapse as long there is enough cash value to cover

Universal life

Policy also offered as unbundled, which means all the pricing elements are disclosed separated by the insurer

Universal life

This insurance is also known by generic name of flexible, premium adjustable life

Universal life

This policy implies that the policy owner has the flexibility to increase the amount of premium paid into the policy and 2 later decreased it again

Universal life

In this cointract the policyowner bears the investment risk(assets in a separate account)

Variable

Life insurance or annuities are contracts in which the cash value accumulate based on specific portfolio of stocks without guarantees if performance

Variable

Insurance that is a level fixed premium investment based products

Variable life

These characteristics can be changed in what policy? A flexible premium that can be increased, decreased or skipped as long as there is CV increasing and decreasing the amount of insurance, cash withdrawals or policy loans

Variable universal life

Type of insurance that combines many features of the whole life with the flexible premium of universal and investment component of variable life

Variable universal life

Type of insurance that combines many features of the whole life with the flexible, premium of universal and the investment component of variable life, making it securities version of universal life insurance

Variable universal life

Provides life time protection and include a savings element

Whole life

The life insurance policy that endows at 100

Whole life

In this policy, the policyowner has these following options to increase or decrease the premium of the premium pay period increase, or decreased amount or change period of protection

adjustable life

Universal Option A

death benefit remains level while the cash value gradually increases