Life Insurance Policies
Which type of life insurance policy generates immediate cash value?
Single Premium
What type of life insurance policy generates immediate cash value?
Single premium
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?
Limited pay whole life
In a group life insurance policy, the employer may select all of the following EXCEPT
The beneficiary
Which of the following statements about group life is correct?
The cost of coverage is based on the ratio of men and women in the group
An Adjustable Life policy owner can change which of the following policy features?
The coverage period
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
Which of the following are generally NOT considered when underwriting group insurance?
The group's medical history
Which of the following Life Insurance policies would be considered interest sensitive?
Universal life
Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Which of the following must an agent receive in order to sell variable life insurance policies?
FINRA registration
J purchased a $100,000 Joint Life policy that covered his life and the life of his wife. Eight years later, he died in an automobile accident. How much will the wife receive from the policy?
$100,000
At age 30, a man wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
Adjustable life
Which of the following best describes annually renewable term insurance?
It is level term insurance
Which is the correct comparison between survivorship life and a joint life policy?
Joint life pays a death benefit on the first death, while survivorship life pays on the last death.
An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario?
Re-entry
All of the following are characteristics of a group life insurance plan EXCEPT
There is a requirement to prove insurability on the part of the participants
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
A Universal Life Insurance policy is best described as
An Annually Renewable Term policy with a cash value account
An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Attained age
An individual has just 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
Which of the following is NOT a way to determine the interest rate in a Universal Life Policy?
Estimate market conditions for the life of the policy
Which statement is NOT true regarding a Straight Life policy?
Its premium steadily decreases over time, in response to its growing cash value
If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require evidence of insurability
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal
Which of the following is NOT true regarding a conversion provision in group life insurance?
The insured may convert to an individual policy with any amount of coverage
Which entity regulates variable life policies?
Both State government and the Insurance Department
An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years
The premium will increase because the insured will be 5 years older than when the policy was originally purchased
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?
Joint Life
Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?
Reduced adverse selection
All of the following are characteristics of a Universal Life policy EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policy owner
All other factors being equal, the least expensive first-year premium payment is found in
Annually Renewable Term
All other factors being equal, the lest expensive first-year premium payment is found in
Annually Renewable Term
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
Lower
The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
In an Adjustable Life policy, all of the following can be changed by the policy owner EXCEPT
The type of investment
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. What policy is that?
Joint life policy
Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
Juvenile Life is classified as any life insurance purchased by a minor.
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B - Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the ash value increases. At any point in ti e, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes the scenario?
Re-entry
All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay Life
An insurance policy that only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, matures at the insured's age 100, is called
Single premium whole life
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract
A life insurance policy owner skips her premium payment, but the policy does not lapse. Instead, the premium amount is deducted from the cash value of the policy. What type of policy is this?
Universal life
A term insurance policy, with level premium and level death benefits, that provides coverage until the insured's 65th birthday, is what kind of contract?
Term-to-65
The death protection component of Universal Life Insurance is always
Annually Renewable Term
