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Basic Principles Of Insurance > Ch Exam Types Of Insurance Policies > Flashcards

Ch Exam Types Of Insurance Policies Flashcards

1
Q

A life insurance policy that has premiums fully paid up within a state it time period is called?

A

Limited payment insurance

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2
Q

All of these statements concerning whole life insurance arefalse except?

A

When a whole life policy is surrendered income tax may be owed

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3
Q

Which of the following other premium payments for a universal life policy not used for?

A

Separate account investments

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4
Q

Joe has a insurance policy that has a face value of $300,000. At the end number of years, the policy cash value accumulate to $50,000 and the face amount becomes $350,000. What kind of policy is this?

A

Universal life policy

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5
Q

Krista purchase a 10 year level term life insurance policy that has a death benefit of 200 K. Which of these statements is true?

A

The premium and the face amount will remain constant for the ten-year period

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6
Q

Which of these would be the best example of a limited paid life insurance policy?

A

Whole life policy with premiums paid up after 20 years

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7
Q

Which of the following type of life insurance is normally associated with a mortgage loan?

A

Decreasing term

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8
Q

Tom is shopping for a policy that covers two people and would pay the face amount only when the first person dies. The type of life policy he is looking for is called a ?

A

Joint life policy

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9
Q

Which of the following statements do not apply to child Coverage in a family policy?

A

Only children born prior to policy issue dates may be included

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10
Q

What is the automatic continuance of insurance covers referred to as?

A

Renewal

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11
Q

Under a modified endowment contract, what are the likely tax consequences?

A

Predeath distributions will become taxable

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12
Q

In a modified endowment contract, the penalty tax imposed on premature withdrawal is

A

10%

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13
Q

Judy has a $100,000.30 year mortgage on her home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30 year period?

A

Decreasing term insurance

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14
Q

Predeath distributions for a modified endowment contract receivers different tax treatment than other life insurance policies because

A

The modified endowment contract tend to be an investment vehicle

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15
Q

Which of the following policies does not build cash value?

A

Term

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16
Q

Insurance policy with the insured can choose where to cash value can be invested is called?

A

Variable life

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17
Q

Donald is the primary insured on a life insurance policy and as a Children term rider. What is the advantage of adding this rider?

A

Can be converted to permanent coverage without evidence of insurability

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18
Q

A partial surrender is allowed in which of the following life policies

A

Universal life

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19
Q

Which of the following is not a true description of non-medical life insurance

A

Applicants are not required to answer medical questions on the application.

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20
Q

The type of policy which pays on the death of the last person is called

A

Survivorship life

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21
Q

How are survivorship life insurance policies helpful in estate planning?

A

Provides funds to help pay taxes

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22
Q

Which type of policy combines the flexibility of a universal life policy with investment choices?

A

Variable Universal life policy

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23
Q

The statement which best describes the relationship between a premium of a whole life policy and the Premiumpayment period is

A

The short of the payment., The higher premium

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24
Q

John and Mary has a handicap child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both like we would be. What policy best suited for them

A

Second to die policy

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25
Q

When is decreasing term policy is purchase, it contains a decreasing death benefit and

A

Level premium

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26
Q

Mark, age 45, has a modified endowment contract. What is the tax penalty for taking a loan against his policy prior to age 59 1/2?

A

10%

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27
Q

Which of these riders will pay a death benefit if the insured spouse die?

A

Family term insurance rider

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28
Q

A spouse and child can be added to a primary insurance coverage as what kind of rider?

A

Family term

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29
Q

Which type of multiple protection policy pays on the death of the last person?

A

Survivorship life policy

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30
Q

All of these are valid options for an adjustable life policy except

A

A nonforfeiture option can be used to increase the death benefit

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31
Q

A securities license is required for a life insurance producer to sell?

A

Variable life insurance

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32
Q

The least expensive Option to pay off a 30 year mortgage balance would be?

A

Decreasing term life

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33
Q

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person’s death?

A

Last survivor life insurance

34
Q

A life insurance policy that pays the face amount if the insurance advised to a specific period of time is called

A

Endowment insurance

35
Q

A life insurance policy that is a subject to a contract interest rate is referred to as

A

Universal life

36
Q

Variable life insurance and universal life insurance are very similar. Which of these features are hell exclusively by Variable universal life insurance?

A

Policy owner has the right to select a investment which will provide the greatest return

37
Q

Term insurance is approximate for someone who’s

A

Seats temporary protection and lower premiums

38
Q

A policy owner may change to policy features on what type of life insurance

A

Adjustable life

39
Q

All of these are characteristics of a universal life insurance policy except

A

Fixed surrender value

40
Q

Sean, Mike, and Dave are brothers who have a $100,000 first to die joint life policy cover in all three of their lives. If Mike dies first the policy proceeds

A

Will no longer provide insurance protection

41
Q

A business will typically use which type of life insurance to cover their employees?

A

Group policy

42
Q

A limited payment whole life policy provides

A

Life protection

43
Q

Index whole life insurance contains a security component that acts as

A

Hedge against inflation

44
Q

Insurance policy which contains cash values that very accordingly to is investment performance of stocked is called

A

Variable whole life

45
Q

Peter has a policy where 80% to 90% of the premium is invested in traditional fix income securities and remainder of the premium is a visit in a contractor to a stipulated stock index. What kind of policy is this?

A

Equity indexed whole life

46
Q

An insurance policy written out the 1988 that feels to pass to seven pay test is known as

A

A modified endowment contract

47
Q

What happens to the coverage on a Children term rider when the child reaches a certain specific age?

A

Courage is Eliminated

48
Q

A life insurance policy that contains a guarantees interest rate with a chance to earn a rate that is higher than the guarantee rate is called?

A

Universal life

49
Q

A permanent life insurance policy where the policy owner pays premiums for a specific number of years is called

A

Limited pay policy

50
Q

What is the proper order for additional life insurance premium, from lowest to highest?

A

Modified premium, ordinary life, single premium

51
Q

The premium for a modified whole life policy is

A

Lower than the typical whole life policy doing the first few years and then higher than typical for the remainder

52
Q

What does the word “level”level term describes

A

The face amount

53
Q

Which of the following is a life insurance policy that does not require a physical examination?

A

Non-medical


54
Q

Which type of life insurance policy pays the face I’m out at the end of the specific If the insured is still alive

A

Endowment policy

55
Q

What is a corridor in relation to a universal life insurance policy?

A

The gap between the total death benefit and the policy cash value

56
Q

Which of these describes a result of a modified endowment contract that fails to meet the seven pay test

A

Predeath distributions are typically taxable

57
Q

What type of life insurance are normally use for key employees Indemnification

A

Term, whole, and universal life insurance

58
Q

Jonas is a whole life insurance policy owner and would like to add coverage for his two children. Which of the following products will allow him to Accomplish of this?

A

Child term writer

59
Q

Which type of life insurance offers flexible premiums, A flexible death benefit, and the choice of how the cash value will be invested?

A

Variable universal policy

60
Q

Which of the following is not true regarding a family policy that covers children?

A

Conversion of Charles coverage to permanent insurance requires evidence of insurability

61
Q

Shirley has a $500,000.10 year nonrenewable level term life policy. If she does 15 years as a policy inception date, how much will her beneficiary receive?

A

Nothing

62
Q

The type of multiple protection coverage that pays on the death of the last person that called

A

Survivorship life policy

63
Q

A single premium cash value policy can be described as

A

A policy that is paid up after only one payment

64
Q

Raw purchase a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equal $250,000. Robert recently died at age 60. The death benefit would be

A

$500,000

65
Q

Lynne owns a life policy that guarantees the right to renew the policy each year, regardless of health, but at an increase premium. What kind of policy is this?

A

Renewable term

66
Q

An interest sensitive life insurance policy owner may be able to withdraw the policy cash value interest free. The provision that allows this is called

A

Partial surrender

67
Q

A renewable term life insurance policy allows the policy owner of the right to renew the policy

A

Without producing proof of insurability

68
Q

A modified endowment contract is best described as

A

A life insurance contract that accumulate cash value higher than the IRS will allow

69
Q

Which type of life insurance is normally associated with a payor benefit rider

A

Juvenile insurance

70
Q

A life insurance policy limits of liability will be

A

The policy face amount

71
Q

A life insurance policy written on one contract for two people in which it is payable upon the first death is called

A

Joint

72
Q

Which of the following types of life insurance combines a savings element along with a flexible premium option?

A

Universal life

73
Q

Any renewable term life insurance policy, the contract will usually

A

Require a higher premium payable at each renewal

74
Q

Scott has just purchased a new house. He is now shopping for a life insurance policy that provides the death benefit that message to projected outstanding debt of his mortgage. What life policy would best suit his knees?

A

Mortgage redemption

75
Q

A renewable term life insurance policy can be renewed

A

Add a predetermined date or age, regardless of the insured health 

76
Q

Level premium permanent insurance accumulates a reserve that will eventually

A

Equal the face amount of the policy

77
Q

Decreasing term life insurance is often used to

A

Provide coverage for a home mortgage

78
Q

Which of these is not subject to income tax on the modified endowment contract

A

Death benefit

79
Q

Reggie purchase a life insurance policy with a face value of $500,000. I have a 15 year, the cash that you had accumulated to $100,000 and the policy face amount has become $600,000. Which type of life insurance policy is this?

A

Universal life

80
Q

Which policy feature makes a universal life policy different from a whole life policy?

A

A flexible premium schedule

81
Q

A modified endowment contract is best described as

A

A life insurance contract which accumulate cash value is higher than the IRS will allow

Basic Principles Of Insurance (11 decks)

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