3 - Life Insurance Premiums and Combination Policies

Question 1

How can Life premiums be charged?

Answer 1

• annual
• semi-annual
• quarterly
• monthly

Question 2

Single Premium Life

Answer 2

• one payment

- least expensive

Question 3

Level Premium

Answer 3

-same premiums throughout the contract

Question 4

Adjustable Premium

Answer 4

• can increase or decrease premiums

- universal life

Question 5

Modified Premium

Answer 5

• lower premium in early years

- premiums automatically increases at specified date

Question 6

Graded Premium

Answer 6

-premiums increase gradually over state period

Question 7

Indeterminate Premium

Answer 7

• non-guaranteed

- guaranteed in early years and can be increased in future but not over a guaranteed maximum

Question 8

The Family Policy Characteristics

Answer 8

• Ordinary Whole Life on Primary
• Level Term on suppose and children
• EOI at issue
• both spouses sign application

Question 9

The Family Policy premiums are waived for children if primary dies/disabled until certain age?

Answer 9

True

Question 10

Family Income (Combination) Policy

Answer 10

• Ordinary Whole Life and Decreasing Term Life
• death benefit for primary
• surviving family may receive income from policy

Question 11

Family Maintenance Policy

Answer 11

-same as Family Income but LEVEL TERM LIFE provides the income benefit

Question 12

Face Amount Plus Cash Value Policy

Answer 12

• Whole Life and Increasing Term Insurance

- death benefit equal to WL plus accumulated cash value w/ Increasing Term rider

Question 13

Face Amount Plus Return of Premium Policy

Answer 13

• Whole Life and Increasing Term rider

- rider increases in value equal to amount of premiums paid on policy

Question 14

Joint Life Policy

Answer 14

• First to Die

- variation of Whole Life or Term Life

Question 15

Last Survivor/Survivorship LIfe

Answer 15

• “Last to Die” or “2nd to Die”
• only pays on the death of the last living insured
• estate planning

Question 16

Juvenile Life

Answer 16

• Jumping Juvenile Life

- death benefit is level until certain age, then jumps to a multiple w/ premiums remaining level

Question 17

Rider/Provision that should be included in the Juvenile Life Policy?

Answer 17

• Payor Benefit

- if payor dies/disabled premiums are waived until reaches age of majority

Question 18

Limited Death Benefit

Answer 18

• Guaranteed Issue Policy
• for people normally uninsurable
• 40-75 years old
• death benefit cannot exceed $10,000
• only pays full death benefit if graded period is exceeded

Question 19

With this policy the initial premium is lower than a traditional whole life policy at the time of issue for a stated period but increases to a greater premium after the initial premium period. Which of the following policies does this describe?

Answer 19

-Modified Premium Whole Life

Question 20

You are interviewing a husband and wife who are interested in equal amounts of life insurance for each. A major concern is the amount of premium that they will have to pay. With premium cost in mind which of the following would best serve their needs?

Answer 20

-Joint Life

Question 21

A life insurance policy that provides a monthly income payment period based on the insured’s date of death describes which of the following?

Answer 21

-Family Maintenance Policy

Question 22

J has a life insurance policy that pays his beneficiary $50,000 if he dies and will also pay a monthly income for a period of up to 10 years depending on when J dies. Which of the following does J have?

Answer 22

-Family Income Policy

Question 23

If an insured wanted a Whole Life policy on the breadwinner and smaller Term insurance amounts on all the other members of the family, what type of life policy could the insured choose?

Answer 23

-Family Policy

Question 24

Coverage under which initial premium are less than normal for the first few years, then premiums increase over several years until the premiums become level for the balance of the policy?

Answer 24

-Graded Premium Whole Life

Question 25

What type of insurance is added to the Whole Life portion of the Face Amount plus Cash Value Policy to provide the additional sum if the insured prematurely dies?

Answer 25

-Increasing Term

Question 26

Which life insurance policy becomes payable upon the death of the last named insured?

Answer 26

-Survivorship

Question 27

The Family Policy generally defines an insurable child under the policy as all of the following EXCEPT: a. Step Children b. Foster Children c. Natural Born Children d. Adopted Children

Answer 27

-b. Foster Children

Question 28

Do Life Insurance Policy riders require underwriting?

Answer 28

-no

Question 29

S and K purchased a $100,000 Joint Life Policy. S died and K received a check from the insurance company for $100,000. She also receives a letter 30 days later telling her what her options are regarding her coverage under the policy. Which of the following statements about her insurance would be correct?

Answer 29

-Can convert coverage to individual plan w/out proving insurability

Question 30

A major disadvantage of a multiple protection policy is which of the following:

Answer 30

-no ability to extend the increased death benefit

Question 31

J is interested in buying life insurance, but he feels that if he dies and the policy pays a death benefit, his beneficiary should also receive an amount equal to his current investment in the policy. Which of the following life insurance policies would meet his desires?

Answer 31

-Face Amount plus Return of Premium

Question 32

K is in need of life insurance that will provide benefits for her family if she dies prematurely. She wants the coverage to be level for a 20-year period allowing time for her children to become self-sustaining adults. K would like part of the life insurance to be Whole Life and part of the insurance to be Term Life insurance. Which of the following life insurance policies will fit her needs?

Answer 32

-Family Maintenance Policy

Question 33

The Multiple Protection policy known as the Double Multiple Protection Policy features what two (2) types of life insurance?

Answer 33

-Whole Life and Level Term Life rider

Question 34

The Family Maintenance Policy and Family Income Policy insure:

Answer 34

-one person

Question 35

The Multiple Protection policy known as the Triple Multiple Protection Policy features what two (2) types of life insurance?

Answer 35

-Whole Life and Level Term Life rider

Question 36

If J and M have $100,000 Joint Life Policy and both are killed simultaneously in an auto accident, how much benefit would the policy pay?

Answer 36

-The policy would pay $200,000 to a named contingent beneficiary or the estate of the deceased

Question 37

E has a 20 year income period with her Family Maintenance policy. If E dies 10 years after purchasing the policy her beneficiary will receive income payments for how long?

Answer 37

-20 years

Question 38

The juvenile policy will provide life insurance, but it does not provide _______

Answer 38

-health insurance

Question 39

Which type of life insurance policy requires no underwriting and does NOT provide the full death benefit for a specified period of time?

Answer 39

-Limited Death Benefit

Question 40

This policy provides a level permanent death benefit with a diminishing income benefit.

Answer 40

-Family Income Policy

Question 41

What type of life insurance is added to the Whole Life portion of the Face Amount plus Return of Premium Policy to provide the additional sum if the insured prematurely dies?

Answer 41

-Increasing Term

Question 42

Which of the following life insurance policies is a combination of Whole Life and decreasing term insurance?

Answer 42

-Family Income Policy