Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

NC Life & Health Insurance > Life Insurance Policies > Flashcards

Life Insurance Policies Flashcards

1
Q

In term policies, what happens to the premium throughout the term of the policy?

A

The premium remains the same

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Universal life policies have two types of interest rates. What are they?

A

Guaranteed and current

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured?

A

Evidence/Proof of insurability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What policy component must decrease in decreasing term insurance?

A

Face amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the death benefit options in universal life policies?

A

Option - A level death benefit

Option - B increasing death benefit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to the beneficiary, the premiums must be paid for what time period?

A

For 20 years or until the insured’s death, whichever occurs first.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Whole life policies provide protection until the insured reaches what age?

A

100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Who owns a group life insurance contract?

A

The employer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What type of life insurance policy provides permanent protection?

A

Permanent (whole) life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the characteristics of the group that underwriters will consider before issuing a group life policy?

A

Group’s purpose, size, financial strength and turnover

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What type of premium is charged on a straight life policy?

A

Level premium on the life of the policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

A whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy?

A

Limited-pay whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does ‘level’ refer to in Level term insurance?

A

Face amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When would a 20-pay whole life policy endow?

A

When the insured reaches age 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The death protection component of a universal life policy is expressed as what type of coverage?

A

Annually renewable term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If an insured terminates membership in group life insurance, to what type of insurance can the insured convert coverage?

A

Whole life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Regarding taxation, how does the cash value of a universal life policy accumulate?

A

Tax-deferred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

A policy states that it will pay a specific face amount if the insured dies during the 20 year premium-paying period and nothing if death occurs after the 20 year period. What type of policy is this?

A

20 year level term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Group life insurance policies are written as what type of insurance?

A

Annually renewable term

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What universal life option has a gradually increasing cash value and a level death benefit?

A

Option A has a level death benefit and an increasing cash value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What type of insurance policy can be changed from a policy with no cash value to one that generates cash value?

A

Convertible Term

22
Q

In annually renewable term policies, what is the annual premium based upon?

A

The insured’s attained age

23
Q

Whole life insurance policies mature when the insured reaches age 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans, what portion of the death benefit will be paid to the beneficiary?

A

The full death benefit

24
Q

Under option B in a universal life policy, what happens to the death benefit?

A

The death benefit increases each year by the amount of the cash value increases.

25
Q

What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured’s age 100?

A

Single-premium whole life

26
Q

In a joint life policy, when is death benefit paid?

A

Upon the first death

27
Q

What is the major difference between the most common types of whole life policies: straight life, limited pay and single premium?

A

The length of time the premiums are paid

28
Q

What type of life insurance is best suited to cover a mortgage?

A

Decreasing term

29
Q

What type of whole life insurance policy generates immediate cash value?

A

Single premium whole life

30
Q

What types of life insurance policy is life paid up at age 65?

A

Limited pay whole life

31
Q

What elements of an adjustable life policy can be changed by the policy owners?

A

Premium amount and period, face amount, period of protection

32
Q

What is the purpose of establishing the target premium for a universal life policy?

A

To prevent policy from lapsing

33
Q

In variable universal life insurance, to what policy component does the term ‘variable’ refer?

A

Cash value and death benefit

34
Q

The policy owner of a whole life insurance policy is also the insured. What age must the insured attain in order to receive the policy’s face amount?

A

100

35
Q

What type of life insurance policy offers pure death protection?

A

Term

36
Q

Who is entitled to the cash values in a life insurance policy?

A

The policy owner

37
Q

If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide?

A

Proof of insurability

38
Q

How is the premium determined in a joint life insurance policy?

A

The average age between the insureds

39
Q

An individual has just borrowed $10,000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation?

A

Decreasing term

40
Q

What happens to the premium in an annually renewable term life policy?

A

Premium increases with each renewal

41
Q

Who is insured under a juvenile life policy?

A

A minor

42
Q

Why are policy loans not available on term insurance?

A

Because no cash value is accumulated to borrow against

43
Q

What happens to the cash value when a whole life insurance policy matures?

A

Cash value is paid to the policy owner

44
Q

What is the main advantage of converting from group life insurance to individual coverage?

A

Evidence of insurability is not required

45
Q

What are the ‘living benefits’ of whole life insurance?

A

Loan values

46
Q

A policy owner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that effect the death benefit to the beneficiary?

A

The amount of the loan will be deducted for the death benefit.

47
Q

In what type of life insurance policies can the policy owner skip premium payments without the policy lapsing?

A

Universal life

48
Q

When does an adjustable life policy accumulate cash value?

A

When the premiums paid are more than the cost of the policy

49
Q

Between adjustable life and universal life policies, which one provides more flexibility to the policy owner?

A

Universal life

50
Q

During partial withdrawal from a universal life policy, which portion, if any, will be taxed?

A

Interest earned on the withdrawn cash value

NC Life & Health Insurance (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions