Variable life & Annuities
What is the required minimum amount of coverage on a variable universal life insurance policy?
$50,000
Withdrawals from a variable universal life insurance policy are penalized if made before age
59 1/2
A life insurance policy qualifies a modified endowment contract if the policy would end up as a paid up policy before the end of
7 years
In a viatical settlement, the policyowner sell the life insurance policy to a viatical settlement company in return for
A percentage of the face amount of the policy
Which of the following is used to compute rates, dividends, and risk?
Actuarial tables
The practice of replacing insurance policies for the sole purpose of making commissions is known as
Churning
Loading in premiums is meant to cover
Commissions to agents at operating expenses
The gap between a policies cash value and the death benefit is the
Corridor
All of the following are categories of funding strategies EXCEPT
EXCESS funding
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
Effect of inflation on income over time
An adjustable life policy can assume the form of
Either term insurance or permanent insurance
Judy is a 72-year-old retired nurse who is interested in taking out the new life insurance policy. What type of life insurance planning should Judy be concerned with?
Estate planning
Which of the following are not finding strategies of universal life insurance policies?
Fault funding and provisional funding
All of the following are the separate divisions of a universal contract except
The annual account element
And policy loans, which of the following serves as the collateral for the loan?
The cash value of the policy
Mike wants to send his daughter to college. College costs are estimated to be $50,000 but Mike has only saved $10,000. The $40,000 difference is called the
The deficit
Who controls the amount and the frequency of the payment and a flexible premium policy?
The insured
Which of the following is NOT true regarding variable life insurance and annuities
They are not regulated by the department of insurance
What is the purpose of the surrender charge in a deferred annuity?
To compensate the company for loss of investment value
What provision in an insurance policy extends coverage even if the premium has not been paid?
Waiver of premium
The cash build up in a universal life insurance policy is taxed
When it is withdrawn
In a variable second -to-die life insurance policy, when are tax free survivor benefits payable?
after death of the second party
Which statement is true regarding sales charges in a variable life insurance policy
the maximum charge is 9% calculated over a 20-year period
An insurance contract must contain all of the following to be considered legally binding except
Beneficiaries consent
Based on the nonforfeiture options of a universal life insurance plan, a policyowner may do all of the following except
Borrow the accumulated account value
Which of the following choices best describes the black out.?
From the time when the youngest child reaches the age of 16 until the surviving spouse reaches the age of 16
A premium that is increased at a pre-specified time and then levels over the life of the policy is
Graded
The best definition of annuity unit is
In accounting measure which is created at the beginning of the annuity. And is used to determine the amount of future annuity payments
A policy loan from a variable annuity is available at zero net cost beginning when?
In the 11th policy year
Which of the following is not a feature of a whole life policy?
Increasing premium
The premium charge by insurance companies for the feature that guarantees death benefit payment, even if a policy's investment account is nothing is the
Initial premium
All of the following help determine the maximum funding level except
Insured's hobbies
When comparing cash values between policies, policy owners should refer to the policies
Life insurance surrender cost index
Which of the following is NOT a feature of variable second to-die life insurance policies?
Most have cost switches between investment subsets, and some offer cost daily switches
An insured has a current assumption whole life policy that guarantees a competitive interest rate on the cash value of his account what is the longest number of years that the insured can expect this competitive rate to remain?
One year
Insurance contracts are unilateral which means
Only one party makes a legally enforceable promise
Which of the following is incorrect regarding whole life insurance?
Policy loans are tax-deductible
Who bears all of the rest of a single premium variable life insurance policy?
Policyowner
Based on human life value approach which of the following is not used to calculate an individual's life value?
Predicted needs of the family after the insured's death
What is the name for the rider that provides additional term insurance on the primary insured with guaranteed convertibility?
Primary insured rider
One of the advantages of a variable annuity in comparison to a fix annuity is
Protection against inflation
A universal life insurance policy in which expense charges occur when the policyowner surrenders the policy is called
Back loaded
It's a single premium policy is surrendered within the first 5 to 10 years of coverage the policy owner will be charged a
Back-end fee
With adjustable life, the owner can change all of the following except
The mortality charge
Who is the owner and beneficiary of a charitable adjustable life insurance policy?
The owner and beneficiary have to be separate
A policyowner is looking at his annual statement that has the charges, credits and insurance aspects broken down and listed separately. What type of insurance policy does he have?
Universal Life
Which life insurance policy has a guaranteed minimum death benefit that may fluctuate in value?
Variable life
Which of the following best represents what is meant by life insurance create an immediate estate?
The face value of the policy is payable to the beneficiary upon the death of the insured
Which of the following best represents what is meant by life insurance creates an immediate estate?
The face value of the policy is payable to the beneficiary upon the death of the insured
Is an applicant submits the initial premium with an application, which action constitutes acceptance?
The insurer approves the application*****
