Life Insurance Policies

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Variable Universal Life

A combination of universal life and variable life...

Permanent Life Insurance

A general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured (or until age 100) as long as the premium is paid...

Variable Life

A level, fixed premium, investment-based product...

Cash Value

A policy's savings element or living benefit is called...

The target premium

A recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime...

no cash value

Term insurance has...

Accumulate

To build up...

When the amount of needed protection is time sensitive, or decreases over time.

When is decreasing term primarily used?

If the death occurs within a specified period of time or if the insured outlives the policy term.

When is the return of premium paid?

Term

Which type of insurance policy would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources?

Lifetime (permanent) protection and accumulates cash value.

Whole life insurance provides...

The death benefit is at $0 at the end of the policy term.

Why isn't a decreasing term policy renewable?

Deferred

Withheld or postponed until a specified time or event in the future is called...

1) Be registered with FINRA; 2) Be licensed by the state to sell life insurance; and 3) Have received a securities license.

Agents selling variable life insurance products must...

Renewable Provision

Allows the policyowner the right to renew the coverage at the expiration date without evidence of insurability...

Universal Life

Also known by the generic name of "flexible premium adjustable life"...

Straight Life

Also referred to as ordinary life or continuous premium whole life...

The premiums paid are more than the cost of the policy.

Although adjustable life policies contain most of the common features of other whole life policies, the cash value of an adjustable life policy only develops when...

The insurance company guarantees a return in premium.

An ROP policy offers the pure protection of a term policy, but what happens if the insured remains healthy and is still alive once the term limit expires?

Return of premium (ROP) life insurance

An increasing term insurance policy that pays an additional death benefit to the beneficiary equal to the amount of the premiums paid...

Assets in the general account.

Assets in the separate account cannot be commingled with...

Nonforfeiture Values

Benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses is called...

Ajustable Life: Policy Loans

Can barrow cash value...

Adjustable Life: Key Features

Can be Term or Whole Life; can convert from one to the other...

Adjustable Life: Premium

Can be increased or decreased by policyowners...

The limited-pay policies

Cash value builds up faster for...

Variable Life Insurance Products

Contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance is called...

Fixed Life Insurance Products

Contracts that offer guaranteed minimum or fixed benefits is called...

Insure the payment of a mortgage or other debts if the insured dies prematurely.

Decreasing term coverage is commonly purchased to...

Single Premium Whole Life

Designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment...

Adjustable Life

Developed in an effort to provide the policyowner with the best of both worlds (term and permanent coverage)...

Increasing Term

Features level premiums and a death benefit that increases each year over the duration of the policy term...

Securities

Financial instruments that may trade for value (for example, stocks, bonds, options) is called...

Adjustable Life: Cash Value

Fixed rate of return; general account...

The policyowner to pay more or less than the planned premium.

Flexible premium policies allow...

Universal Life: Premium

Flexible; minimum or target...

Adjustable Life: Face Amount

Flexible; set by policyowner with proof of insurability...

The insured's attained age at the time of the renewal.

If the policy is renewed at the end of the 10-year period, the premium is based on what?

The returned premiums are not taxable.

In an ROP policy since the amount returned equals the amount paid in...

Death benefit

In increasing and decreasing term policies, which policy component fluctuates during the policy term?

The premium remains level.

In indexed life, if the insurer assumes the risk...

The policy premiums increase with the increases in the face amount.

In indexed life, if the policyowner assumes the risk...

Policy Maturity

In life policies, the time when the face value is paid out is called...

Be licensed for both securities and life insurance.

In order to sell Variable Universal Life, a producer must also...

The performance of the portfolio in which the premiums have been invested by the insurer.

In variable life, the cash value of the policy is not guaranteed and fluctuates with...

Proof of insurability

Increases in the death benefit or changing to a lower premium type of policy will usually require...

To fund certain riders that provide a refund of premiums or a gradual increase in total coverage.

Increasing term is often used by insurance companies...

Those insureds who do not want to be paying premiums beyond a certain point in time.

Limited-pay policies are well suited for...

Renewable, convertible, or renewable and convertible.

Most term insurance policies are...

Straight Life

Out of the common whole life policies, which one has the lowest annual premium?

Universal Life: Key Features

Permanent insurance with renewable term protection component...

Decreasing Term

Policies feature a level premium and a death benefit that decreases each year over the duration of the policy term...

Lapse

Policy termination due to nonpayment of premium is called...

Level Term Insurance

Premium and death benefit stay the same...

Annually Renewable Term

Premium goes up each year and the death benefit stays the same...

Decreasing Term

Premium stays the same while the death benefit decreases...

Increasing Term

Premium stays the same while the death benefit increases...

Term Insurance

Premiums for whole life policies usually are higher than...

Level Premium Term

Provides a level death benefit and a level premium during the policy term...

Whole Life Insurance

Provides lifetime protection, and includes a savings elements (or cash value)...

Convertible Provision

Provides the policyowner with the right to convert the policy to permanent insurance policy without evidence of insurability...

25% to 50% more.

ROP policies are structured to consider the low risk factor of a term policy but at a significant increase in premium cost, sometimes as much as...

Temporary & Permanent Protection

Regarding the length of coverage, all life insurance policies fall into 2 categories:

Fluctuate

Rise and fall irregularly in number or amount is called...

The minimum premium and the target premium.

Since the premium can be adjusted in Universal Life, the insurance companies may give the policyowner a choice to pay either of the 2 types of premiums...

Term Insurance

Temporary protection because it only provides coverage for a specific period of time is called...

The lowest premium as compared to any other form of protection.

Term policies provide for the greatest amount of coverage for...

The minimum premium

The amount needed to keep the policy in force for the current year...

Face Amount

The amount of benefit stated in the life insurance policy is called...

Variable Life

The cash values are not guaranteed and the death benefit is not fixed...

Increasing Death Benefit option

The death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases...

Level Death Benefit option

The death benefit remains level while the cash value gradually increases, thereby lowering the pure insurance with the insurer in the later years...

Annually renewable term insurance

The insurance component of a universal policy is always...

Adjustable Life

The insured typically determines how much coverage is needed and the affordable amount of premium...

Attained Age

The insured's age at the time the policy is renewed or replaced is called...

Level Term Insurance

The most common type of temporary protection purchased is called...

Living Benefits

The policyowner can borrow against the cash value while the policy is in effect, or can receive the cash value when the policy is surrendered...

Universal Life

The policyowner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again...

Straight Life

The policyowner pays the premium from the time the policy is issued until the insured's death or age 100...

Variable Life

The policyowner, rather than the insurer, decides where the net premiums (cash value) will be invested...

Level Premium

The premium for whole life policies is based on the issue age; therefore, it remains the same throughout the life of the policy...

Annually Renewable Term

The premium increases annually according to the attained age, as the probability of death increases...

Level Premium

The premium that does not change throughout the life of the policy is called...

Annually Renewable Term

The purest form of term insurance...

Single Premium Whole Life

This policy is completely paid-up after one premium and generates immediate cash...

Limited-pay Whole Life

This type of policy has a shorter premium-paying period, but higher annual premium...

Endow

To have the cash value of a whole life policy reach the contractual face amount is called...

Option A: The level death benefit option. Option B: The increasing death benefit option.

Universal life offers one of two death benefit options to the policyowner which are...

Age 65

What age do the limited-pay policies stop?

Insurance component and cash account

What are the 2 components in a universal policy?

Straight whole life, limited-pay whole life, and single premium whole life.

What are the 3 basic forms of whole life insurance?

1) Level; 2) Increasing; and 3) Decreasing

What are the 3 basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term?

Level premium, death benefit, cash value, and living benefits.

What are the key characteristics of whole life insurance?

Return Of Premium

What does ROP stand for?

Pure Death Protection

What does Term Insurance provide?

The missing premium may be deducted from the policy's cash value, the policy will not lapse.

What happens if an insured skips a premium payment on a universal life policy?

Pure Life Insurance

What is another name for term insurance?

The cash value is dependent upon the performance of the equity index.

What is the main feature of indexed whole life?

Usually 3 to 6%

What's the contract interest rate in a universal policy?

Refers to the death benefit, which does not change.

What's the meaning of "level" in level term insurance?


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