life insurance policies

Question 1

insurance issues very small face amounts,$1000-$2000. Premiums are paid weekly and collected by debit agents. This was designed for burial coverage

Answer 1

industrial life

Question 2

insurance written for members of a group, such as a place of employment, or a union. coverage is provided to the members of the group under one master contract. usually no evidence of insurability required

Answer 2

group life

Question 3

made up of several types of individual life insurance, like term or whole.

Answer 3

ordinary life

Question 4

life insurance that gives you the greatest amount of coverage for a limited period of time.

Answer 4

term life

Question 5

Has a level face amount and level premiums. Life insurance written to cover a need for a specified period of time at the lowest premium. Provides a fixed, low premium in exchange for coverage which lasts a specified time period.

Answer 5

level term

Question 6

Term life insurance that provides an annually decreasing face amount over time with level premiums. Usually used for mortgage protection. Has a death benefit that adjusts periodically and is written for a specific period of time. After the mortgage is paid off, the insurance policy will expire.

Answer 6

Decreasing term

Question 7

is a limited benefit policies and purchased using a decreasing term life insurance policy, with the term matched to the length of the loan period and the decreasing insurance amount matched to the declining loan balance. can only be purchased for up to the amount of the debt or loan outstanding.

Answer 7

credit life policies

Question 8

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

Answer 8

increasing term

Question 9

provides temporary coverage that may be changed to permanent coverage without proof of insurability.

Answer 9

convertible term

Question 10

term coverage that provides a level face amount that renews annually without proof of insurability.

Answer 10

annual renewable term

Question 11

provides temporary level coverage at the lowest possible cost for a limited period of time, but then allows the policyowner to renew the policy to maintain coverage past the policys termination. does not have to prove insurability.

Answer 11

renewable term

Question 12

covers children under their parents policy.

Answer 12

term - rider

Question 13

insurance that provides death benefits for the entire life of the insured, provides living benefits in the form of cash values and it matures at age 100 and normally has a level premium.

Answer 13

whole life

Question 14

types of whole life insuracnes

Answer 14

straight, limited pay, single-premium, modified, and graded

Question 15

basic whole life insurance with a level face amount and fixed premiums payable over the insureds entire life. premium payments made until death of insured or age 100.

Answer 15

straight life

Question 16

whole life insurance where the insured is covered for his entire life but premiums are paid for a limited time. as the premium payment period shortens, cash values.

Answer 16

limited pay life

Question 17

allows the insured to pay the entire premium in one lump-sum and have coverage for the insureds entire life.

Answer 17

single premium whole life

Question 18

low premiums in the early years and jumps to a higher premium in the later years and remains fixed thereafter. premiums increase just once.

Answer 18

modified whole life

Question 19

the premium increases yearly for a stated number of years, then remains level.

Answer 19

graded whole life

Question 20

design to insure all family members under one policy. the family head is covered by whole life insurance and the spouse/children are included on the same policy as family term riders.

Answer 20

family plan policies

Question 21

provides income to a beneficiary for a selected period of time if an insured die during that period. at the end of the paying period, the beneficiary also receives the entire face amount of the policy. if an insured die after the end of the selected period, the beneficiary receives only the face value of the policy.

Answer 21

family maintenance policy

Question 22

pays a benefit of double or triple the face amount if death occurs during a specified period. if death occurs after the period has expired, only the face amount is paid. combo of permanent insurance and level term insurance.

Answer 22

multiple protection policies

Question 23

policy that covers two or more people. insureds are average age and a single premium is charged. uses permanent insurance and pays a death benefit when one of the insureds dies.

Answer 23

joint life policy

Question 24

life insurance that covers a minor. payor provision is attached

Answer 24

juvenile insurance

Question 25

designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid. normally issued in an amount not to exceed the outstanding loan balance and is usually paid entirely by the borrower. a decreasing term policy is most often used.

Answer 25

credit life insurance

Question 26

the cash value can increase beyond the stated guarantee if economic conditions warrant. also called current assumption whole life insurance.

Answer 26

interest-sensitive whole life

Question 27

distinguished by their flexibility that comes from combining term and whole life insurance into a single plan.

Answer 27

adjustable life policies

Question 28

a variation of whole life insurance, characterized by considerable flexibility. allows the policyowners to determine the amount and frequency of premium payments which will adjust the policy face amount. flexible premiums, flex benefits, no minimum death benefit, and cash value withdrawals.

Answer 28

universal life

Question 29

suggested premium used in universal life policies.

Answer 29

target premium

Question 30

permanent life insurance policy that allows policyholders to tie accumulation values to a stock market index. gives the security of fixed universal life insurance with growth potential of a variable policy linked to indexed returns.

Answer 30

equity index of universal life insurance
EIUL

Question 31

policy that is overfunded, according to the IRS tables. policies that do not meet the 7-pay test.

Answer 31

Modified Endownment Contracts
MEC

Question 32

created to help offset the effects of inflation on death benefits. main difference from traditional whole life is the manner in which the policys values are invested. the policy values are invested in the insurers separate accounts which house common stock, bond, money market, and other securities investment options. basic characteristics are fixed premiums, a guaranteed minimum death benefit which fluctuates over the minimum, and cash values which fluctuate and are not guaranteed,.

Answer 32

variable life insurance

Question 33

builds cash value. provides the policyowner with flex premiums, adjustable death benefits, a guaranteed minimum death benefit and gives the insured growth potential for higher returns, but also potential for loss.

Answer 33

variable universal whole life
VUL