Chapter 6 &7 Flashcards
Three options are available to policy owners who decides to surrender a whole life policy, the policy owner can stop paying premiums and he will not forfeit the cash value or equity that has built up in the policy.
Non forfeiture options( cash value must be present)
What are the three non forfeiture options
Surrender for cash, extended level term insurance, reduced paid up premium insurance.
allows the policy owner to return or send the policy back in return for its cash saving value.
Surrender for Cash
allows the policy owner to surrender the whole life in exchange for a level term plan with the same face amount
Extended Level Term Insurance
The cash value will be identical to the face amount of the surrender whole life policy
Extended Level Term Insurance
Provides the insured with the most life insurance protection in the event of voluntary or none premium payment
Extended Level Term Insurance
Policy allows the policy owner to surrender the policy and use the cash value to buy a smaller or reduced amount of permeant paid up life insurance.
Reduced Paid up permeant insurance
What are some ways policy owners can receive dividends
CASH, Reduced Premiums, Accumulate at interest , Paid up permeant additions , paid up options, one year term.
Which of the following policy options allows a policy owner effectuate a single premium purchase.
Reduced Premium Payments
All the following are dividend options EXCEPT
Reduced paid Up Options
Which of the following non - forfeiture option provides the greatest amount of protection
Extended Term insurance
The policy owner exercises a paid up additions dividend option the amount coverage purchase will based upon the insured attained age and
The amount of the dividend
Use Dividend to purchase additional whole life insurance
Paid up additions
Informs insure to return dividend to a designated account
Accumulate interest
Dividend Used to simply purchase any type of term insurance that the insurer offers
One year term
Return the Dividend and subtract the amount from the premium
Reduced Premium
Insure will send Dividend directly to the insured
Cash
Which of the following settlement options pays a specified monthly income for as long as the policy proceeds plus interest last
Fixed Amount
A rider that pays an increasing amount of term insurance equal to the amount of total payments made for coverage, in addition to the death benefit at the time of death, is known as
Return of Premium
Benefit of 1% of the face value of the policy which payable if the insured is totally disabled. Income benefits begin after the six month waiting period.
Disability Income benefit Rider
If the insured becomes disabled for six consecutive months, the insurer promises to waive ant future premium payments. Until he or she returns to work.
Waiver Of Premium
Which none forfeiture option is automatically exercised if a policy lapse with current cash value and the insurer is unable to contact the policy owner
Surrender For Cash
A rider that permits a the policy owner to purchase additional life insurance without tak9ng a physical examination best describes
Guaranteed Insurability Rider
If a whole life policy premium is not paid by the end of the contract grace period and the policy contains several thousand dollars of equity, what policy option will protect the insured against a coverage lapse
Non forfeiture benefit
A series of periotic payments made to an annuitant
Annuities
Only sold by a life insurance company
Annuities
Liquidation of an estate
Annuities
In individual deposits in or make contributions to a annuity during the pay in or
accumulation phase
As the contract owner receives the initial periodic installment the policy owner is now know as a
Annuitant
The interest earned on the principal is
Tax deferred
Receives tax deferral on interest but no tax deductions on premiums or yearly tax savings on through salary reduction.
none qualified annuity
If a policy owner dies or becomes disabled funds can be with drawn without a penalty.
annuity
Parties involved in a annuity contract
Contract owner, annuitant and beneficiary
If a annuitant dies with no beneficiary listed what happens
proceeds will be paid to the policy owners estates
Constant payment that funds the annuity each year.
Level Premium ( periodic premium annuity )
Premiums that may be variable amounts each year
Flexible premium annuity ( periodic premium annuity )
What determines annuity premiums
interest rate paid, contributions or accumulations and settlement options
generate an income stream to the annuitant as soon as it is purchased.
immediate annuity 30 days after funded( only lump sum premiums)
Does not the permit the contract holder to make any additional payments9 No accumulation period )
Single premium annuity
may be funded with any type of premium and does include a accumulation period
Deferred Annuity
Lengthy time between when the contract is purchase and when the income or annuity phase begins
Deferred Annuity
emphasis safety of principal asset acclamation and tax deferral on interest
Deferred Annuity
Guarantees a pre determined income or level payment amount which is paid each month for life
Fixed Annuity
Guarantees a safety of principal as long the insurer remains solvent
Fixed Annuity
Invest in safe conservative investments
Fixed Annuity
annuity generally consist of two separate accounts including general and separate account
Variable annuity
Funds invested in a separate account that are invested in equity products such as stocks and bonds
Variable annuity
Classified by the length of time the annuitant will receive income, Provide income to the recipient for life with no refund
Pure Life annuity
No survivorship. protects against outliving ones income
Pure Life annuity
Pays a benefit for life but pays a survivor benefit if the annuitant dies before the benefit period (i.e) 10 years
Straight Life Annuity with period certain
an option an annuity owners may add to there variable retirement annuities
guaranteed minimum withdraw l rider
An annual premium retirement annuity contract is characterized by
High Loads
All of the following statements regarding annuities are true EXCEPT.
Annuities may only be funded with flexible premiums
Which of the following is true regarding a cash refund classification of an annuity
The interest received as part of the refund is taxable in the same year received
An annuity is different from life a insurance contract an each of the following ways EXCEPT
An Annuity is characterized as pre paid financing were life insurance is characterized as a pre paid premium
Bob desires an annuity that will provide him with periodic income for a short period of time with out the life guarantee of income of income. Which of the following will help him achieve this objective.
Annuity certain
Alice leaves 50,000 each to her two twin grandchildren George and Gracie. Each one purchases a annuity with a life option. Which of the following is true concerning this statement.
George monthly benefit will be greater than Gracie
Which of the following may take a loan or distribution from a fixed annuity
Contract Owner
The primary purpose of straight life annuity is to protect against
Superannuation
