Life Insurance
All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance.
For variable products, underlying assets must be kept in
A separate account
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account
An employee quote his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Attained age
Term life - Decreasing Term
Coverage decreases at predetermined times gradually; best used when the need for protection declines from year to year
What characteristics makes whole life permanent protection?
Coverage until death or age 100
Which component increases in the increasing term insurance?
Death benefit
An individual has 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?
Decreasing term
What does "level" refer to in level term insurance!
Face amount
Which of the following is correct regarding credit life insurance?
It insures the life of a debtor
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
Term Life - Level Premium Term
Level death benefit and level premium
Whole Life - Limited Payment
Premiums are paid until a certain age or time; coverage in effect to age 100
Whole Life - Single Payment
Premiums paid in one lump sum and coverage continues to age 100
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 10 is called
Single premium whole life
An employee is insured under her employer's group life plan. If she terminated her group coverage, which of the following statements is INCORRECT?
The insured may choose to covert term to permanent individual coverage
Which of the following statements is correct regarding a whole life policy?
The policyowner is entitled to policy loans
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
Variable
Whole Life - Straight Life (Continuous Premium)
• Basic policy • Level death benefit • Insured pays premiums for life or until age 100
Other Types of Policies - Varibale Life
• Fixed premium, minimum death benefit • Cash value and the actual amount of death benefit are not guaranteed • Assets in separate accounts • Agents must be dually licensed in insurance and in securities
Flexible Premium - Universal Life
• Has an insurance component in the form of annually renewable term • 2 death benefit options: Option A - level death benefit, Option B - increasing death benefit • Can make partial surrender/cash withdrawal • Flexibility through unbinding (separating)
Other Types of Policies - Group Life
• Master Contract goes to the sponsor, usually employer • Certificate of Insurance goes to member • Underwritten as a group • If coverage after open enrollment-proof of insurability is required • Conversion to individual policy in 31 days - same face amount but higher premiums due to attained age
Whole Life - General Characteristics
• Permanent protection • Guaranteed elements (face amount, premium, and cash value) until death or age 100 • Level premium • Cash value and other living benefits
Flexible premium - Adjustable Life
• Policyowner may adjust the premium and premium-paying period, the face amount, and the period of protection • Can be converted from term to whole life and vice versa • Cash value only develops if the premiums paid are more than the cost of the policy
Term Life - General Characteristics
• Pure protection • Lasts for specifc term • No cash value
Term Life - Annually Renewable Term
• Renews each year without proof of insurability • Premiums increases due to attained age
Flexible Premium - General Characteristics
• Type of whole life insurance • Flexible premium
