Life Insurance Exam CHAPTER 3-Exam 1
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on investment performance
Under a Renewable Term policy,
The renewal premium is calculated on the basis of the insured's attained age
A policy that becomes a Modified Endowment Contract (MEC):
Will lose many of its tax advantages
Additional coverage can be added to a Whole Life policy by adding a(n):
Decreasing term rider
A variable insurance policy:
Does not guarantee a return on its investment accounts
A 15-year mortgage is best protected by what kind of life policy?
15-year decreasing term
What type of life insurance are credit policies issued as?
Term
How does a typical Variable Life Policy Investment account grow?
Through mutual funds, stocks, bonds.
What type of policy would offer a 40-year old the quickets accumulaton of cash value?
20-pay life
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase?
Ten-Year Endowment
The Universal Life Policy is called an unbundled life policy because the policyholder can see the expense charges, the interest earned, and the:
Cost of insurance
Credit Life insurance is:
Issued in an amount not to exceed the amount of the loan.
Which of the following statements is Correct about the period in which a Term Policy can be converted?
It varies according to the contracts
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Modified Endowment contract
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of Policy is needed?
Level Term
Which is true concerning a variable universal life policy?
Policyowner controls where the investment will go and selects the amount of the premium payment.
Which type of life policy contains a monthly morality charge as well as self-directed investment choices?
Variable universal life
J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
20-pay life
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract.
What type of insurance offers permanent life coverage with premiums that are payable for life?
Whole life
