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Life And Health Exam > Life Insurance Policies > Flashcards

Life Insurance Policies Flashcards

1
Q

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

A

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

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2
Q

When would a 20-pay whole life policy endow?

A

When insured reaches age 100

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3
Q

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

A

The insured’s attained age

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4
Q

What type of policy is typically issued without proof of insurability from the insured?

A

Group policy

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5
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

Evidence of insurability

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6
Q

A policy states that it will pay a specified 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

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7
Q

What is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single Premium?

A

Premium payment mode

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8
Q

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

A

The premium remains level

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9
Q

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

A

Variable

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10
Q

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

A

To prevent the policy from lapsing

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11
Q

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

A

Cash value and death benefit

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12
Q

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

A

Decreasing term

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13
Q

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

A

The premium is based on the average age of the insured’s

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14
Q

What does level refer to in level term insurance?

A

Face amount

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15
Q

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

A

Universal life

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16
Q

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

A

Annually renewable term

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17
Q

What are the characteristics of the group that underwriters will consider before issuing group life policy?4

A

1 groups purpose
2 size
3 financial strength
4 turnover

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18
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

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19
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

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20
Q

What type of life insurance policy provides permanent protection?

A

Whole life

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21
Q

What are the death benefit options in universal life policies?2

A

1 level death benefit

2 increasing death benefit

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22
Q

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

A

Whole life

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23
Q

Why are policy loans not available on term insurance?

A

There is no cash value to borrow against

24
Q

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

A

Upon the first death

25
Q

Who is insured under a juvenile life policy?

A

A minor

26
Q

What type of policy issues certificates of insurance to the insured’s?

A

Group policy

27
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

28
Q

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

A

The full death benefit

29
Q

What type of life insurance policy offers pure death protection?

A

Term

30
Q

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

A

Cash value is paid to the policy owner

31
Q

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

A

Limited pay whole life

32
Q

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

A

The policy owner

33
Q

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

A

Single premium whole life

34
Q

What policy component must decrease in decreasing term insurance?

A

Face amount

35
Q

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

A

Evidence of insurability is not required

36
Q

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

A

The premium increases with each renewal

37
Q

When does an adjustable life policy accumulate cash value?

A

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

38
Q

The policyowner 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

Age 100

39
Q

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

A

Guaranteed and current

40
Q

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

A

Level premium for the life of the insured

41
Q

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

A

Age 100

42
Q

What elements of an adjustable life policy can be changed by the policy owners?3

A

1 amount of payment period of premium

2 the face amount

3 period for protection

43
Q

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

A

Universal life

44
Q

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

A

Annually renewable term

45
Q

Who owns a group life insurance contract?

A

The employer (also known as the sponsor of the group)

46
Q

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

A

Evidence of insurability

47
Q

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

A

Option A

48
Q

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

A

Tax deferred

49
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 the cash value increases

50
Q

What are the living benefits of whole life insurance?

A

Loan values

51
Q

What does level refer to in level term insurance?

A

Face amount

52
Q

How are the variable annuities regulated?

A

By state and federal agencies

53
Q

Which type of life insurance policy generates immediate cash value?

A

Single premium

54
Q

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

A

Universal life option A

55
Q

The death protection component of Universal Life Insurance is always…

A

Annually Renewable Term

Life And Health Exam (40 decks)

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