Life Insurance Policies Flashcards
True or False: Term insurance is temporary, but the whole life is permanent.
True
For how long will the premium on a 20-year level term policy remain level?
For 20 years
Cash value increases with every _________ payment after the _______ year.
Cash value increases with every PREMIUM payment after the THIRD year.
What age is used to determine level term policy renewals?
Premiums are based on a person’s actual age, and renewal premiums will increase.
Which life policy has cash value gains that mirror or are tied to a stock market index, such as the S&P 500?
An Indexed Life Insurance policy
Describe an endowment.
Endowments have heavy cash savings, intended for future uses such as retirement or college funding.
True or False: A 20-year family maintenance income policy pays for 5 years if the insured dies 15 years after the policy issue.
False.
Regardless of the date of death, the policy will pay for 20 years since it uses level term insurance.
Identify the acronym: VL
Variable Life
A 5-year level term policy will renew every 5 years subject to ____________________________.
maximum age limitation
Straight life has a ________________ and _______ premium.
Straight life has a PREDETERMINED and level PREMIUM.
True or False: A universal life policy allows for partial withdrawals of the cash value.
True
What whole life product has lower premiums that increase each year for the first 3 to 5 years of the policy?
Graded premium whole life
Does a variable life policy have a guaranteed minimum death benefit?
Yes. Regardless of account performance, the minimum DB is paid (typically, the initial DB listed on the policy’s face).
A 10-year level term policy provides coverage for ____ years.
10
As the client ages, what happens to her premium payments in a variable life policy?
Payments in a variable life policy remain fixed (level).
What is an unbundled premium?
When a UL life policy-owner receives an annual statement breaking down all of the policy expenses and charges
Name the policy that combines whole life insurance and a level term rider providing coverage on the breadwinner.
A Family Maintenance plan
A jumping juvenile policy may also be called ___________________________.
juvenile life insurance
The cash value of a whole life policy grows at a minimum interest rate of ___% to ___%.
3% to 4%
A WL death benefit and premium both remain _______ for the life of the policy.
level
What is the target premium?
The initial premium established to fund a UL policy
What is another name for a “First to Die” policy?
Joint Life
What life insurance policy pays a benefit at the earlier of death or the end of a specified period?
An endowment
The death benefit and premium in a whole life contract are _______ throughout the owner’s lifetime.
level
Cash value generally begins to build within a whole life policy sometime in the ______ year.
third
What is the renewability feature?
The ability to renew a term policy without having to provide evidence of insurability
A jumping juvenile policy has a death benefit that increases to ___ times its stated value with no premium increase.
5
What nontraditional life insurance policy has a flexible death benefit and a rate of return that is interest-sensitive?
A universal life policy
Which WL payment option would have the lowest overall premium over the policy life– 10-pay, 20-pay, or single-pay?
Single-pay
What is a lump-sum premium?
Another name for single-pay whole life
Which policy pays a death benefit and concludes or ends on the death of any insured party listed on the contract?
A Joint Life policy
Which policy pays a death benefit and concludes or ends on the death of any insured party listed on the contract?
A Joint Life policy
Whole life premium rates are based on a rate per $_______ of coverage.
$1,000
The cash value of a single premium whole life policy will equal the death benefit at age _____.
100
Describe a whole life policy.
A policy providing death benefit protection for life or to age 100, cash value, level death benefit, and level premium
Decreasing term insurance has a ____________ death benefit.
decreasing
At what age is a whole life policy’s cash value assumed to equal its death benefit?
At age 100
What does term insurance provide?
The maximum amount of protection with the lowest initial outlay of premiums
A VL policy has a _____________ minimum death benefit, but the cash value is ________________.
A VL policy has a GUARANTEED minimum death benefit, but the cash value is not GUARANTEED.
What two licenses are required to sell variable products?
A life insurance and FINRA license