Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Insurance Liscense > CH2 > Flashcards

CH2 Flashcards

1
Q

What is Attained age?

A

he insured’s age at the time the policy is issued or renewed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is Cash value?

A

a policy’s savings element or living benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Face amount?

A

the amount of benefit stated in the life insurance policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a Deferred policy?

A

when it’s withheld or postponed until a specified time or event in the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Policy maturity?

A

in life policies, the time when the face value is paid out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Endow ?

A

the cash value of a whole life policy has reached the contractual face amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is Level premium?

A

the premium that does not change throughout the life of a policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is Liquidation of an estate?

A

converting a person’s net worth into a cash flow

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are Nonforfeiture values?

A

benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are Securities?

A

financial instruments that may trade for value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is Term insurance? and what it is also referred as?

A

It is a temporary protection. Term insurance provides the greatest amount of coverage for the lowest premium. Term insurance has no cash value.

It is also known as pure life insurance.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is Level term insurance? and what does Level mean?

A

It is the most common type of temporary protection purchased.

The word level refers to the death benefit that does NOT change throughout the life of the policy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which are the three basic types of term coverage available?

A

Level, Increasing and decreasing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the benefit of a Level premium term?

A

The monthly premium remains the same during the entire temporary policy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is Decreasing term insurance?

A

The death benefit decreases over time.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is Annually renewable term?

A

the policy may be guaranteed to be renewable each year without proof of insurability, but the premium increases annually

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Return of premium (ROP)?

A

when all the premiums are returned if the death occurs within a specified period of time or if the insured outlives the policy term.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does Whole life insurance provide?

A

It provides lifetime protection and accumulates cash value.

16
Q

What are the three forms of Whole Life Insurance?

A
  1. Ordinary Whole Life
  2. Limited-pay Life
    3.Single Premium Life
17
Q

What is Ordinary Whole Life? and what is it also known as?

A

The policyowner pays the premium from the time the policy is issued until the insured’s death or age 100. This option has the lowest premium.

Straight life

18
Q

What is Limited-pay Life designed for? and who are they more suitable for?

A

It is designed so that the premiums for coverage will be completely paid-up well before age 100.

People who want to retire at 65 and don’t want to pay premiums at that age.

19
Q

What is Single premium whole life?

A

When the premium is paid in a one time lump sum payment

20
Q

What is Adjustable life? and when does the cash value develope under this policy?

A

It’s a life policy that can assume the form of either term insurance or permanent insurance.

It only develops when the premiums paid are more than the cost of the policy.

21
Q

Universal life insurance is also known as?

A

flexible premium adjustable life

22
Q

What is Universal life insurance?

A

a policy that allows the policyowner the flexibility to increase the amount of premium paid into the policy and to later decrease it again.

23
Q

T or F

If an insured skips a premium payment on a UNIVERSAL LIFE policy, the missing premium may be deducted from the policy’s cash value. The policy will NOT lapse.

A

T

24
Q

Universal life policies allow what?

A

partial withdrawal

25
Q

Universal life offers which death benefits?

A

level death benefit and increasing death benefit option.

26
Q

What is Variable universal life insurance?

A

It combines many features of the whole life with the flexible premium of universal life and the investment component of variable life

27
Q

What is Variable Whole Life? what makes this policy variable?

A

is a level, fixed premium, investment-based product.

The premiums will be put into an investment portfolio by the insurer.

28
Q

What is Interest-sensitive whole life?

A

is a whole life policy that provides a guaranteed death benefit. The insurer sets the initial premium based on current assumptions about risk, interest and expense but they may change.

29
Q

What is Indexed Life?

A

Is a policy that the cash value is dependent upon the performance of the equity index, such as S&P 500

30
Q

What is Joint Life policy? and when is the death benefit paid?

A

is a single policy that is designed to insure two or more lives. It is cheaper than 2 single premiums.

The death benefit is paid when the first person dies.

31
Q

How is Joint Life policy premium calculated?

A

by averaging the ages of both insureds.

32
Q

What is Survivorship Life policy?

A

The same as joint life policy but the death benefit is paid on the last death.

33
Q

What’s an Annuity?

A

is a contract that provides income for a specified period of years, or for life

34
Q

What is an Annuitant?

A

the person who receives benefits or payments from the annuity, the annuitant must be a natural person

35
Q

What’s the accumulation period annuity?

A

is the period of time over which the owner makes payments (premiums) into an annuity. Pay- IN

36
Q

What is annuity period?

A

It’s the period of time over which the annuity pays out to the annuitant. Pay-Out

37
Q

In an annuity, which individuals benefits the most?

A

The individuals that have a lower life expectancy (older)

38
Q

immediate annuity starts paying when?

A

within the first year

39
Q

What are fixed annuities? what is one downside?

A

The annuitant will receive fixed payments always.

The payments may not be enough due to inflation

39
Q

deferred annuity starts paying when?

A

after the first year.

40
Q

A detail of life with guaranteed minimum

A

if the annuitant dies before the principal amount has been paid out, the remainder of the principal amount will be refunded to the beneficiary

Insurance Liscense (12 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions