Life Insurance Policies

Question 1

renewable without a physical examination, up to a certain age.

Answer 1

Term insurance

Question 2

may be converted to whole life, but not the reverse. Conversion is based on the
insured’s current age.

Answer 2

Term insurance

Question 3

convertible based upon the current or attained age of the insured.

Answer 3

Convertible term

Question 4

the re-entry option is contingent upon the insured passing a physical
exam.

Answer 4

Term insurance

Question 5

the premium and the amount of coverage are level throughout the term.

Answer 5

Level Term

Question 6

the premium will increase every year, although the

face amount will remain the same.

Answer 6

Annual Renewable Term (ART)

Question 7

The face amount of a mortgage protection life insurance policy will decrease at the same rate as
the mortgage balance declines.

Answer 7

Term insurance

Question 8

T/F

It is the face amount that decreases on a decreasing term policy, not the premium.

Answer 8

True

Question 9

type of life insurance provided in mortgage redemption insurance.

Answer 9

Decreasing term

Question 10

must contain a table showing their guaranteed cash value at the end of each
year (anniversary date) for the first 20 years. It is shown per unit (per thousand).

Answer 10

Whole life

Question 11

benefits are bundled (packaged).

Answer 11

Whole life

Question 12

benefits are transparent (stand-alone).

Answer 12

universal life

Question 13

reach maturity at the same time (age 100).

Answer 13

Whole life and limited pay

Question 14

premiums are due until the insured dies or reaches age 100.

Answer 14

Whole life

Question 15

premiums are paid for a shorter period of time.

Answer 15

limited pay

Question 16

has a level premium and will provide coverage until the insured
dies or reaches age 100.

Answer 16

Straight or whole life

Question 17

pay the face amount upon death or age 100, whichever comes first.

Answer 17

Whole life

Question 18

though paid up earlier, do not mature until the insured reaches
age 100.

Answer 18

Limited pay whole life

Question 19

T/F

Limited pay whole life insurance has limits that pertain either to the number of years payments
must be made, such as 20 pay-life, or the age by which all premiums must be paid, such as life
paid-up at 65.

Answer 19

True

Question 20

the cash value will equal the face amount at maturity.

Answer 20

20-pay whole life

Question 21

T/F

A single premium may buy a policy that is paid up for life.

Answer 21

True

Question 22

T/F

A single premium policy has an immediate cash value.

Answer 22

True

Question 23

This may be suitable for someone with fluctuating income

Answer 23

Adjustable whole life

Question 24

T/F

Adjusting the premium paid on an adjustable whole life policy will affect the face amount, and
vice versa.

Answer 24

True

Question 25

different from whole life because it has a premium that is flexible.

Answer 25

Universal life insurance

Question 26

These policies permit their owners to take partial surrenders.

Answer 26

Universal life insurance

Question 27

T/F Taking a partial surrender on a universal life policy allows the policyowner to withdraw some of the cash value without paying tax on the interest.

Answer 27

True

Question 28

This type of insurance is also known as interest sensitive whole life.

Answer 28

Universal life insurance

Question 29

a combination of 1-year renewable term and a cash value account.

Answer 29

Universal life insurance

Question 30

offers flexible premiums and a minimum guaranteed rate of return.

Answer 30

Universal life insurance

Question 31

Loans are allowed on these kinds of policies

Answer 31

Universal life

Question 32

allows the insured to self-direct the cash value investment.

Answer 32

Variable life

Question 33

have no guarantees and are not backed by the guaranty fund.

Answer 33

Variable policies

Question 34

T/F Investing in variable products isn't considered a hedge against inflation.

Answer 34

False, it is considered a hedge against inflation.

Question 35

A universal life policy that has an investment component is called...

Answer 35

variable universal life.

Question 36

A life insurance policy that invests its cash values in equities is known as...

Answer 36

variable life.

Question 37

A life insurance policy that has a flexible premium and allows the policyowner to self-direct their cash values into equities is known as...

Answer 37

variable/universal life

Question 38

T/F An agent must be registered with FINRA in order to sell a variable product.

Answer 38

True

Question 39

pays only when the first insured dies.

Answer 39

joint life policy

Question 40

pays only | when the second insured dies.

Answer 40

joint and survivor life policy

Question 41

commonly used in estate planning so the death benefit of the | policy can be used to pay estate taxes when due.

Answer 41

Survivorship life insurance

Question 42

pays when the surviving insured dies.

Answer 42

Survivorship life insurance

Question 43

a life insurance policy written on the life of a minor.

Answer 43

A juvenile life insurance policy

Question 44

T/F On credit life, the creditor is both the policyholder and the beneficiary.

Answer 44

True

Question 45

The type of policy used to provide credit life insurance

Answer 45

decreasing term.

Question 46

T/F The policy limits on credit life cannot exceed the amount of the loan.

Answer 46

True

Question 47

the employees receive a certificate of insurance that summarizes coverage and lists the employee's beneficiary.

Answer 47

Group life insurance

Question 48

the policyowner, who is usually an employer, is issued the master policy.

Answer 48

Group insurance

Question 49

75% eligible employees must enroll.

Answer 49

contributory group life insurance policy,

Question 50

100% of all eligible | employees must participate.

Answer 50

noncontributory group life plan (employer pays total premium)

Question 51

T/F Individual policies are usually more expensive than group.

Answer 51

True

Question 52

the employer may require an employee to pay the premium for dependent's coverage.

Answer 52

Group life

Question 53

T/F Group insurance participation requirements don't help to avoid adverse selection.

Answer 53

False: they do help

Question 54

T/F A group cannot be formed just to buy insurance.

Answer 54

True

Question 55

T/F Experience rating is for large groups only. Rates are based on claims experience of the group.

Answer 55

True