Life Insurance Part 2

3: A Return of Premium term life policy is written as what type of term coverage? A Increasing B Decreasing C Renewable D Level

A Increasing

What type of premium do both Universal Life and Variable Universal Life policies have? A. Flexible B. Level fixed C. Decreasing D. Increasing

A. Flexible

Which of the following is a key distinction between variable whole life and variable universal life products? A. Variable whole life has a guaranteed death benefit. B. Variable universal life is regulated solely through FINRA. C. Variable whole life allows policy loans from the cash value. D. Variable universal life has a fixed premium.

A. Variable whole life has a guaranteed death benefit.

When would a 20-pay whole life policy endow? A. When the insured reaches age 100 B. At the insured's age 65 C. After 20 payments D. In 20 years

A. When the insured reaches age 100

Which of the following is NOT true about a joint and survivor annuity benefit option? A. The surviving annuitant may receive reduced payments. B. Payments stop after the first death among the annuitants. C. A period certain option may be included. D. This option guarantees income for two or more recipients.

B. Payments stop after the first death among the annuitants.

Which of the following would help prevent a universal life policy from lapsing? A. Corridor of insurance B. Target premium C. Face amount D. Adjustable premium

B. Target premium

Which of the following is TRUE regarding the premium in term policies? A. Decreasing term policy will have a decreasing premium. B. The premium is level for the term of the policy. C. Only level term policy has a level premium. D. The premium in term policies is not based on the insured's age.

B. The premium is level for the term of the policy.

All of the following are true about variable products EXCEPT A. Policyowners bear the investment risk. B. The premiums are invested in the insurer's general account. C.The minimum death benefit is guaranteed. D.The cash value is not guaranteed. Terms and Conditions

B. The premiums are invested in the insurer's general account.

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT A. Upon conversion, the premium for the permanent policy will be based upon attained age. B. Upon conversion, the death benefit of the permanent policy will be reduced by 50%. C. Evidence of insurability is not required. D. Most term policies contain a convertibility option.

B. Upon conversion, the death benefit of the permanent policy will be reduced by 50%.

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? A Refund life B Variable annuity C Annuity certain D Fixed annuity

C Annuity certain

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy? A. Nothing B. $50,000 C. $100,000 D. $200,000

C. $100,000

What are the two components of a universal policy? A. Mortality cost and interest B. Separate account and policy loans C. Insurance and cash account D. Insurance and investments

C. Insurance and cash account

During partial withdrawal from a universal life policy, which portion will be taxed? A. Principal B. Loan C. Interest D. Cash value

C. Interest

Which of the following best describes annually renewable term insurance? A. Neither the premium nor the death benefit is affected by the insured's age. B. It provides an annually increasing death benefit. C. It is level term insurance. D. It requires proof of insurability at each renewal.

C. It is level term insurance.

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? A. Whole Life B. Ordinary Life C. Joint Life D. Decreasing Term

C. Joint Life

Variable Whole Life insurance is based on what type of premium? A. Flexible B. Graded C. Level fixed D. Increasing

C.Level fixed

Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend A Life income with period certain. B Installment refund. C Joint and survivor. D Straight life.

D Straight life.

A Universal Life Insurance policy is best described as a/an A. Annually Renewable Term policy with a cash value account. B. Variable Life with a cash value account. C. Whole Life policy with two premiums: target and minimum. D. Flexible Premium Variable Life policy.

A. Annually Renewable Term policy with a cash value account.

When an annuity is written, whose life expectancy is taken into account? A. Annuitant B. Beneficiary C. Life expectancy is not a factor when writing an annuity. D. Owner

A. Annuitant

The death benefit under the Universal Life Option B A. Gradually increases each year by the amount that the cash value increases. B. Decreases by the amount that the cash value increases. C. Increases for the first few years of the policy, and then levels off. D. Remains level.

A. Gradually increases each year by the amount that the cash value increases.

The LEAST expensive first-year premium is found in which of the following policies? A. Level Term B. Annually Renewable Term C. Increasing Term D. Decreasing Term

B. Annually Renewable Term

What does "level" refer to in level term insurance? A. Interest rate B. Face amount C.Premium D. Cash value

B. Face amount

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy? A Joint and survivor B Life with period certain C Joint limited annuity D Joint life

D Joint life

Which of the following products will protect an individual from outliving their money? A. Joint and survivor policy B. Adjustable life policy C. Permanent life insurance D. Annuity

D. Annuity

What is another name for interest-sensitive whole life insurance? A. Variable life B. Term life C. Adjustable life D. Current assumption life

D. Current assumption life

Which policy component decreases in decreasing term insurance? A. Cash value B. Dividend C. Premium D. Face amount

D. Face amount

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? A. Variable annuity B. Flexible payment annuity C. Deferred interest annuity D. Immediate annuity

D. Immediate annuity

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? A. Interest-sensitive whole life B. Life annuity with period certain C. Increasing term D. Limited pay whole life

D. Limited pay whole life

All of the following are true regarding a decreasing term policy EXCEPT A. The death benefit is $0 at the end of the policy term. B. The contract pays only in the event of death during the term and there is no cash value. C. The face amount steadily declines throughout the duration of the contract. D. The payable premium amount steadily declines throughout the duration of the contract.

D. The payable premium amount steadily declines throughout the duration of the contract.

Which statement is NOT true regarding a Straight Life policy? A. Its premium steadily decreases over time, in response to its growing cash value. B. The face value of the policy is paid to the insured at age 100. C. It usually develops cash value by the end of the third policy year. D. It has the lowest annual premium of the three types of Whole Life policies.

A. Its premium steadily decreases over time, in response to its growing cash value.

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 The face amount minus the premiums that would have been collected until the insured reached the age of 100 B A full death benefit C A death benefit equal to the cash value of the policy D 50% of the death benefit

B A full death benefit

What type of premium do both Universal Life and Variable Universal Life policies have? A. Increasing B. Flexible C. Level fixed D. Decreasing

B. Flexible

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 A. Until the policy owner's age 100, when the policy matures. B. For 20 years or until death, whichever occurs first. C. Until the policy owner reaches age 65. D. For at least 20 years.

B. For 20 years or until death, whichever occurs first.

Fixed annuities provide all of the following EXCEPT A. Future income payments. B. Hedge against inflation. C. Equal monthly payments for life. D. Minimum guaranteed rate of interest.

B. Hedge against inflation.

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be? A. Cash refund B. Installments for a fixed period C. Installments for a fixed amount D. Installment refund

B. Installments for a fixed period

An insured purchased a Life Insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an A. Adjustable Life. B. Interest-sensitive Whole Life. C. Credit Life. D. Annual Renewable Term.

B. Interest-sensitive Whole Life.

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured? A. Option A B. Option B C. Corridor option D. Variable option

B. Option B

Which of the following is another term for the accumulation period of an annuity? A. Annuity period B. Pay-in period C. Premium period D. Liquidation period

B. Pay-in period