02 Policies

Question 1

What happens to the cash value when a whole life insurance policy matures?

Answer 1

Cash value is paid to the policy owner.

Question 2

Whole life policies provide protection until the insured reaches what age?

Answer 2

Age 100.

Question 3

How long will a life annuity with a 15 year period certain pay?

Answer 3

For the life of the annuitant unless he or she dies within the first 15 years of the innuitization period; then the payments will last for 15 years.

Question 4

What type of whole life insurance policy generates immediate cash value?

Answer 4

Single premium whole life.

Question 5

When would a 20-pay whole life policy endow?

Answer 5

When the insured reaches age 100.

Question 6

Under option B in a universal life policy, what happens to the death benefit?

Answer 6

Under option B, the death benefit increases each year by the amount of the cash value increases.

Question 7

In flexible premium payment annuities, the term flexible refers to what?

Answer 7

Amount of premium.

Question 8

In a joint life policy, when is the death benefit paid?

Answer 8

Upon the first death.

Question 9

What universal life option he has a gradually increasing cash value and a level death benefit?

Answer 9

Option a.

Question 10

In what type of life insurance policies can the policy owner skip premium payments without the policy lapsing?

Answer 10

Universal life.

Question 11

An annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is known as what type of annuity?

Answer 11

Flexible premium deferred annuity.

Question 12

With a single premium deferred annuity, when will the annuity payments become available?

Answer 12

No sooner than one year after the annuity purchase.

Question 13

Who is entitled to the cash value in a life insurance policy?

Answer 13

The policy owner.

Question 14

What elements of an adjustable life policy can be changed by the policy owners?

Answer 14

The amount and payment period of the premium, the face amount, and the period for protection.

Question 15

What type of annuity can be purchased with a single premium?

Answer 15

Immediate annuity.

Question 16

When does an Adjustable life policy of accumulate cash value?

Answer 16

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

Question 17

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

Answer 17

Beneficiary.

Question 18

What type of annuity requires an agent to have a securities license?

Answer 18

Variable annuity.

Question 19

What type of premium is charged on a straight life policy?

Answer 19

A level premium for the life of the insured.

Question 20

During partial withdrawal from a universal life policy, what person, if any, will be taxed?

Answer 20

Interest earned on the withdrawn cash value.

Question 21

Why are policy loans not available on term insurance?

Answer 21

There is no cash value to borrow against.

Question 22

What type of license is required to sell variable annuities?

Answer 22

A life insurance license and a securities license.

Question 23

Mortality tables are used by insurance companies to predict what?

Answer 23

Life expectancy and death rates for specific groups of individuals.

Question 24

What type of annuity credits its interest based upon an index such as S&P 500?

Answer 24

Equity indexed annuity.

Question 25

What is the difference between a single premium and a flexible premium payment options in a deferred annuity?

Answer 25

The number of payments that purchase the annuity.

Question 26

In an annuity, an accumulated money is converted into a stream of income during which phase?

Answer 26

Annuitization period.

Question 27

What are the two classifications of annuities according to the time when annuities payments begin?

Answer 27

Immediate and deferred.

Question 28

Who receives income payments from an annuity?

Answer 28

Annuitant.

Question 29

What type of whole life insurance policies only requires a payment of premium at its inception, and in addison to providing insurance protection for the life of the insured, and endows at the insured age hundred?

Answer 29

Single premium whole life.

Question 30

The death protection component of a universal life policy is expressed as what type of coverage?

Answer 30

Annually renewable term.

Question 31

Can a business or a corporation be an annuitant?

Answer 31

No, an annuitant must always be a natural person.

Question 32

If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?

Answer 32

Joint life annuity.

Question 33

Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?

Answer 33

The annuitant receives payments from the annuity during the annuitization period; The beneficiary receives benefits after the annuitant’s death.

Question 34

What are the two phases of an annuity?

Answer 34

Accumulation and annuitization

Pay in and pay out

Question 35

If the annuitant dies before the annuitization period starts, what will the beneficiary receive?

Answer 35

Either the amount paid to the annuity or the cash value, which ever is greater.

Question 36

An individual has contract that will provide him with a certain amount of income for the rest of his life. However, this is not a life insurance policy. What type of contract does this person have?

Answer 36

Annuity.