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Pre-licensing > Key insurance policy types > Flashcards

Key insurance policy types Flashcards

1
Q

What is Accidental Death and Dismemberment Insurance (AD&D)?

A

This is a form of insurance that provides benefits in the event of accidental death; the accidental loss of sight, speech, or hearing; loss of use of limbs (i.e., paralysis); or loss of a member(s), such as the loss of an arm or a leg.

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2
Q

What does Accidental Death Benefit (ADB) provide?

A

The ADB provides a lump-sum payment for loss of life due to an accident that was the direct cause of death.

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3
Q

What is an Additional Premium?

A

This provision is used in Universal Life Policies. Additional premiums can be paid into the policy account in an amount above the target premium.

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4
Q

What is Attained Age?

A

This is the age that a person or an insured has attained as of a given date, based on either the nearest birthday or the last birthday.

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5
Q

What is Adjustable Life Insurance?

A

This is a type of policy that combines permanent, whole life, and temporary term life into a single plan that provides the policy owner with the flexibility to adjust premiums throughout the life of the policy.

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6
Q

What is Cash Surrender Value?

A

This is the amount that’s available in cash upon the surrender of a policy by the owner before or after the policy matures.

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7
Q

What is Cash Value in a whole life policy?

A

This is the equity portion of a whole life policy that increases with each subsequent premium payment and is designed to equal the policy’s death benefit at age 100.

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8
Q

What is Credit Insurance?

A

This is insurance that’s designed to pay the balance of a loan if the insured dies or becomes permanently disabled before the loan has been repaid in full.

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9
Q

What is Convertible Term Life Insurance?

A

This is temporary life insurance that provides the policy owner with the right to exchange an existing policy for other policies offered by the insurance company.

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10
Q

What is Decreasing Term Insurance?

A

This is a type of temporary protection characterized by a reducing face amount each year while the cost of coverage remains constant.

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11
Q

What is an Endowment Contract?

A

This contract pays a face amount after a fixed time period, at a specific age, or upon the death of the insured if it occurs before the end of the period.

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12
Q

What is Evidence of Insurability?

A

This involves an insurance applicant establishing that they meet the insurance company’s health requirements.

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13
Q

What is Extended Term Insurance?

A

This is a non-forfeiture option that continues the same face amount of the policy for a specified additional period after surrender.

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14
Q

What is Face Amount in life insurance?

A

This is another name for the death benefit of a life insurance policy.

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15
Q

What is a Family Income Policy?

A

This policy combines a whole life policy with a decreasing term rider to provide a death benefit and monthly income payments to the beneficiary.

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16
Q

What is a Family Maintenance Policy?

A

This policy combines whole life insurance and a level term rider, providing monthly income during a stated period after the insured dies.

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17
Q

What is a Family Policy?

A

This policy covers an entire family, with whole life insurance for the primary insured and varying amounts of level term insurance for the rest.

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18
Q

What is a Guideline Premium?

A

This represents the maximum premium that can be paid into universal life policies while still qualifying as life insurance under federal tax laws.

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19
Q

What are Indexed Contracts?

A

These are contracts where the policy holder can share in a percentage of the growth of an indexed investment, with guaranteed principles.

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20
Q

What is Increasing Term Life Insurance?

A

This is term life insurance that provides an increasing face amount over time based on specific amounts or a percentage of the original face amount.

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21
Q

What is Industrial Life Insurance?

A

This insurance requires premiums to be paid monthly or more often, with a face amount not exceeding a stated amount.

22
Q

What is Joint Life Insurance (First to Die Insurance)?

A

This policy covers the lives of two or more persons, paying a death benefit when the first insured dies.

23
Q

What is Joint Life Survivor (Last to Die Insurance)?

A

This policy covers the lives of two or more persons, paying a death benefit when the last insured dies.

24
Q

What is Juvenile Life Insurance?

A

This is a life insurance policy owned by an adult and written on the lives of children.

25
Q

What is Level Premium?

A

This describes a premium that remains constant, fixed, or predetermined throughout the life of a policy.

26
Q

What is Life Insurance?

A

This represents insurance on the lives of human beings that creates an immediate and guaranteed estate upon death or at the end of a predetermined period.

27
Q

What is Limited Pay Life Insurance?

A

This is a plan where premiums are payable for a specified number of years, after which the policy remains in effect for life without additional payments.

28
Q

What is Maturity Date in life insurance?

A

This is the date on which a life insurance policy becomes payable due to the death of the insured or reaching a specified age.

29
Q

What is Maturity Value?

A

This is the amount paid under a whole life insurance contract if the insured reaches the age of the mortality table.

30
Q

What is a Modified Endowment Contract (MEC)?

A

This is a whole life insurance policy where early premium payments exceed the sum required for the first seven years.

31
Q

What is a Modified Life Policy?

A

This is a whole life plan characterized by a lower premium during the initial years, which then increases and remains level.

32
Q

What is a Mortgage Redemption Plan?

A

This is another name for a decreasing term life insurance policy used to provide funds for a survivor to pay off a debt.

33
Q

What is a Mutual Insurance Company?

A

This is an insurance company owned and controlled by its policy holders, issuing participating policies that may pay dividends.

34
Q

What are Non-Forfeiture Values?

A

These are benefits that must be made available to the policy owner if she surrenders the policy by discontinuing premium payments.

35
Q

What is Non-Medical Life Insurance?

A

This is issued without requiring a medical examination, relying on the applicant’s answers and references.

36
Q

What is Non-Participating Insurance?

A

This is a type of insurance policy issued by a stock insurer that doesn’t pay dividends to policy holders.

37
Q

What is Ordinary Life Insurance?

A

This is an insurance policy issued by commercial insurers with face values of $1,000 or multiples thereof.

38
Q

What is Paid-Up Insurance?

A

This is life insurance on which future premium payments are not required, often after a specified number of payments.

39
Q

What is Participating Insurance?

A

This is a type of insurance policy that entitles the policy holder to share in the divisible surplus of the insurer through dividends.

40
Q

What is Permanent Life Insurance?

A

This is any plan of life insurance designed to last throughout the life of the insured, characterized by level premium and cash value.

41
Q

What are Policy Proceeds?

A

This refers to the amount paid as a death, surrender, or maturity benefit, including face value and any earned dividends.

42
Q

What is Policy Term?

A

Typically expressed in years, this is the time for which a policy remains in existence.

43
Q

What is Renewable Term Life Insurance?

A

This is temporary life insurance that may be renewed at the end of the policy term without evidence of insurability.

44
Q

What is Single-Premium Insurance?

A

This involves the payment of one premium large enough to cover the cost of a life or annuity contract for life.

45
Q

What is Straight Life Insurance?

A

This is a type of whole life insurance that provides coverage for the entire life of the insured, with premiums payable until death.

46
Q

What is a Stock Insurance Company?

A

This is an insurance company owned and controlled by its stockholders who share in its divisible surplus.

47
Q

What is a Target Premium?

A

This represents the suggested premium used in universal life insurance policies, indicating what may be needed to maintain the policy.

48
Q

What is Term Life Insurance?

A

This is temporary life insurance designed to afford coverage for a limited number of years, with no cash value.

49
Q

What is Universal Life Insurance?

A

This is adjustable life insurance under which premiums and coverage are adjustable, with company expenses not explicitly disclosed.

50
Q

What is Variable Life Insurance?

A

This is life insurance whose face value or duration varies depending on the value of underlying securities.

51
Q

What is Variable Universal Life Insurance?

A

This combines the flexible premium features of universal life with variable life, where cash value depends on investment results.

52
Q

What is Whole Life Insurance?

A

This is the form of life insurance that may be kept in force for a person’s entire life, paying a benefit upon death.

Pre-licensing (4 decks)

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