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XCEL Life, Accident, and Health Insurance FOR CALIFORNIA > LIFE INSURANCE POLICIES > Flashcards

LIFE INSURANCE POLICIES Flashcards

1
Q

straight life has a ___ and ___ premium

A

predetermined and level premium

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2
Q

T or F: upon death, the cash value is payable in addition to the whole life death benefit

A

false

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3
Q

describe an adjustable life policy

A

a policy that offers the ability to change the death benefit based on a person’s needs

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4
Q

the cash value of a whole life policy grows at a minimum interest rate of ___ % to ___ %

A

3% to 4 %

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5
Q

decreasing term insurance has a ___ premium and a ___ death benefit

A

level premuim and a decreasing death benefit

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6
Q

the premium on a universal life policy may be ____

A

flexible

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7
Q

describe a family policy

A

a family policy provides whole life benefits on a breadwinner, with level term insurance on spouse and dependents.

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8
Q

what is predetermined in a whole life contract?

A

the death benefit, cash values, premiums, nonforfeiture and surrender values

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9
Q

what life insurance policy pays a benefit at the earlier of death or the end of a specified period?

A

an endowment

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10
Q

which policy pays a death benefit, but only after the last remaining policy insured dies?

A

survivorship life

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11
Q

a jumping juvenile policy has a death benefit that increases to ___ times its stated value with no premium increase

A

x 5

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12
Q

VL stands for:

A

variable life

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13
Q

what does term insurance provide?

A

the maximum amount of protection with the lowest initial outlay of premiums

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14
Q

at what age does a whole life policy mature?

A

100

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15
Q

as a client ages, what happens to her premium payments in a variable life policy?

A

payments in a variable life policy remain fixed (level)

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16
Q

what is straight life or continuous premium life?

A

additional ways to describe ordinary whole life

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17
Q

the death benefit and premium in a whole life contract are ___ throughout the owner’s lifetime

A

level (remain the same)

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18
Q

T or F: a universal life policy allows for partial withdrawals of the cash value

A

true

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19
Q

___ life insurance is purchased to protect a borrower if a lender dies and cannot repay a loan

A

credit life

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20
Q

what is original age or retroactive conversion?

A

a type of conversion that uses the age of the original policy purchase.

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21
Q

name the ability to change from a term policy to a whole life policy without providing evidence of insurability?

A

convertibility

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22
Q

what is attained or actual age conversion?

A

conversion where new policy premiums are based on a person’s current age

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23
Q

What is attained or actual age conversion?

A

conversion where new policy premiums are based on a person’s current age

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24
Q

what whole life product has lower premiums for the first 3 to 5 years of the contract, with a one-time premium increase?

A

modified premium whole life

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25
Q

when converting policies, what must remain constant?

A

generally, the death benefit must remain constant

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26
Q

what type of policy protects the bank in the event a borrower dies?

A

credit life

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27
Q

a 5 year level term policy will renew every 5 years subject to ___

A

maximum age limitations

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28
Q

which life insurance policy has a cash value that is invested in securities and has the potential for greater growth?

A

variable life policy

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29
Q

the cash value and potential death benefit of a VL policy vary ___

A

daily

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30
Q

which WL payment option would have the lowest overall premium over the policy life, 10-pay, 20-pay, or single-pay?

A

single-pay

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31
Q

a VL policy has a ____ premium and a cash value that is ___.

A

level premium and a not guaranteed

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32
Q

what are the two UL death benefit options?

A

A and B

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33
Q

decreasing term insurance has a ___ death benefit

A

decreasing

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34
Q

cash value generally begins to build within a whole life policy sometime in the ___ year

A

third

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35
Q

can the death benefit of a VL policy increase over time?

A

yes, assuming the underlying investments outperform expectations and increase in value.

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36
Q

What happens at age 100?

A

age 100 is the age at which many insurers calculate the policy’s cash value as equal to its death benefit.

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37
Q

does a variable life policy have a guaranteed minimum death benefit?

A

yes, regardless of account performance, the minimum DB is paid (typically, the initial DB listen on the policy’s face)

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38
Q

a 10 year level term policy provides coverage for ___ years

A

10

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39
Q

T or F: Term insurance builds cash value.

A

False

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40
Q

T or F: a 20 year family maintenance income policy pays for 5 years if insured dies 15 years after policy issue.

A

False; regardless of the date of death, the policy will pay for 20 years since it uses level term insurance.

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41
Q

at what age is a whole life policy’s cash value assumed to equal its death benefit?

A

100

42
Q

Most credit life policies utilize ___ term insurance and coverage may not exceed the ___

A

decreasing term ; the amount of the loan

43
Q

What WL product has a guaranteed minimum return and opportunity for CV growth based on the performance of a stock index?

A

equity-index whole life

44
Q

Which policy pays a death benefit and concludes or ends on the death of any insured party listed on the contract?

A

a joint life policy

45
Q

what age is used to determine level term policy renewals?

A

premiums are based on a persons actual age, and renewal premiums will increase.

46
Q

what life insurance policy uses dividends to purchase one-year term insurance to supplement a reducing death benefit?

A

enhance ordinary or economatic life

47
Q

premiums on a VL policy are ___

A

fixed

48
Q

what is single-pay whole life?

A

a whole life policy with a one-time premium and coverage provided until age 100 or death

49
Q

what two licenses are required to sell variable products?

A

a life insurance and FINRA license

50
Q

who is the owner of a juvenile insurance policy?

A

the parent or legal guardian

51
Q

does a term life policy have cash value?

A

no, term life is pure insurance

52
Q

the premium on an annually renewable level term policy increases ___

A

each year

53
Q

what is another name for interest-sensitive whole life insurance

A

current assumption whole life

54
Q

what are the advantages of term insurance?

A

it is initially less expensive then WL, it may offset debts, and ensures insurability

55
Q

a jumping juvenile policy may also be called ___

A

juvenile life insurance

56
Q

what policy combines whole life insurance and a decreasing term rider providing coverage on the breadwinner?

A

a family income policy

57
Q

what is another name for a “first to die” policy

A

joint life

58
Q

what are the disadvantages of term insurance?

A

temporary protection, no cash value, premiums increase with each renewal (level term)

59
Q

describe an equity index life policy

A

usually a UL policy with cash value tied to an equity index account; offers a guaranteed minimum rate of return

60
Q

which whole life payment option would have the highest annual premium - 10, 20 or 30 pay?

A

10 pay - the fewer the payments, the greater each payment must be for the policy to mature.

61
Q

a level term policy has a ___ death benefit and premiums will increase at the ___ period.

A

level death benefit, next renewal period

62
Q

what nontraditional life insurance policy has a flexible death benefit and a rate of return that is interest-sensitive?

A

a universal life policy

63
Q

a WL death benefit and premium both remain ___ for the life of the policy

A

level

64
Q

describe an endowment

A

heavy cash savings, intended for future uses such as retirement or college funding

65
Q

in a group credit policy, the bank is both the ___ and the ___

A

policyowner and the beneficiary

66
Q

what is another name for a second or last to die policy?

A

suvivorship life

67
Q

what is policy equity

A

the cash value in a whole life policy

68
Q

a VL policy has a ___ minimum death benefit, but the cash value is ___

A

guaranteed minimum death benefit, cash value is not guaranteed

69
Q

what type of insurance policy is most often used as a mortgage redemption policy?

A

decreasing term insurance

70
Q

whole life premiums remain ___ for the life of the policy

A

level

71
Q

what whole life product has lower premiums that increase each year for the first 3 to 5 years of the policy?

A

graded premium whole life

72
Q

who assumes the investment risk in a traditional insurance contract?

A

the insurance company

73
Q

whole life is a combination of term protection and ___

A

cash value

74
Q

how long will coverage be provided under a 10-pay whole life product?

A

until death or age 100

75
Q

why is whole life insurance more expensive than term insurance?

A

because of the building of cash value

76
Q

what is the renewability feature?

A

the ability to renew a term policy without having to provide evidence of insurability

77
Q

whole life premium rates are based on a rate per $ ___ of coverage.

A

$1,000

78
Q

describe a whole life policy

A

a policy providing death benefit protection for life or to age 100, cash value, level death benefit, and level premium

79
Q

what is an unbundled premium?

A

when a UL life policyowner receives an annual statement breaking down all of the policy expenses and charges

80
Q

T or F: regardless of cash value performance, VL policies have a guaranteed minimum death benefit

A

true

81
Q

a 20-year endowment will mature at the end of ___ years

A

20

82
Q

term insurance is described as ___ protection

A

pure protection

83
Q

what is a lump-sum premium

A

another name for a single-pay whole life

84
Q

what is cash value

A

the equity that grows inside a permanent policy

85
Q

name the policy that combines whole life insurance and a level term rider providing coverage on the breadwinner

A

family maintenance plan

86
Q

the death benefit of a term policy is payable only if death occurs during the ___ policy

A

term coverage period

87
Q

the cash value of a single premium whole life policy will equal the death benefit at age ___

A

100

88
Q

for how long will the premium on a 20-year level term policy remain level?

A

20 years

89
Q

T or F: term insurance is temporary, but whole life is permanent.

A

true

90
Q

what is the target premium?

A

the initial premium established to fund a UL policy

91
Q

what are loan option and cash surrender?

A

methods available to the policyowner to obtain or access the policy;s cash value

92
Q

T or F: a 20-year family income policy will pay for 7 years if insured dies 13 years after the policy issue.

A

true. the policy will pay the 7 years of remaining benefit as it uses decreasing term insurance.

93
Q

generally, credit insurance uses ___ term

A

decreasing term

94
Q

what is 10-pay whole life?

A

a whole life policy with premiums paid for 10 years and coverage provided until age 100 or death

95
Q

which life policy has cash value gains that mirror or are tied to a stock market index, such as the S&P 500?

A

an indexed life insurance policy

96
Q

a VL contract has a guaranteed minimum ___

A

death benefit

97
Q

what policy combines variable life with flexible premiums?

A

variable universal life

98
Q

what type of insurance provides temporary protection?

A

term insurance

99
Q

___ pay a living benefit at end of a set timeframe or a death benefit should death occur during that timeframe.

A

endowments

100
Q

T or F: a whole life policy never requires renewal

A

true

101
Q

cash value increases with every ___ payment after the ___ year

A

premium payment after the 3rd year

102
Q
A

XCEL Life, Accident, and Health Insurance FOR CALIFORNIA (19 decks)

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