Chapter 1 Exam Types Of Insurance Policies Flashcards
How does a typical Variable Life Policy investment account grow?
Through mutual funds, stocks bonds
Which type of life policy contains a monthly charges as well as self-directed investment choices?
Variable Universal Life
What kind of premium does a Whole Life policy have?
Level
Which of these would be considered a Limited-Pay Life policy?
10-year Renewable and Convertible Term
LIFE PAID-UP at Age 70
Straight whole Life
Renewable Term to Age 100
Limited-Pay Life is Life paid up at age 70
What type of life policy covers two people and pays upon the death of the last insured?
Survivorship
The amount of coverage on a group credit life policy is limited to:
The insured’s total loan value
A term life insurance policy matures:
Upon the insured’s death during the term of the policy
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of teem coverage is this?
Renewable
What type of policy would offer a 40-year old the quickest accumulation of cash value?
Paid-up at 65
20-pay life
30-pay life
Straight whole life
20-pay life
Stranger-Owned Life Insurance (STOLI) is when a person purchases life insurance only to sell to a(n):
Third party with no insurable interest
Which is true concerning a Variable Universal Life policy?
Policyowner controls where the investment will go and selects the amount of the premium payment
Which of the following actions is NOT possible with a Universal Life policy?
Policy’s cash value may be used to pay premiums
Premium payments may be made at unscheduled times
PERMIUMS MAY BE APPLIED AS CREDIT AGAINST INCOME TAX
Face amount may be adjusted
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $ 20,000 at the end of that 20 year period. What type of policy should P purchase?
Family Maintenance policy
Which of these statements describe a Modified Endowment contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as life insurance contract
Kay pays on a $20,000 20-year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit
Which of the following characteristics is CORRECT about Interest Sensitive WHOLE LIFE?
Premium payments can vary
S is covered by a whole life policy. Which insurance product can cover his children?
Child term rider
A 42 year old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need?
Universal Life
A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provisions
Payor provision
Which of these characteristics is consistent with a Straight Life policy?
Premiums are payable for as long as there is insurance coverage in force
Which of these life products is NOT considered interest-sensitive?
MODIFIED WHOLE LIFE
Variable Universal Life
Interest Sensitive Whole Life
Variable Life
MODIFIED WHOLE LIFE
Which of these is an element of a Variable Life policy?
A FIXED, LEVEL PREMIUM
Insurer assumes the investment risk
No investment risk to the policyowner
Rate of returns are guaranteed
When applied to Whole Life insurance, the word “straight” denotes:
The duration pf premium payments
Which of the following types of polices pays a benefit if the the insured goes blind?
AD&D