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sc license > Life Insurance Policies - Chapter 4 > Flashcards

Life Insurance Policies - Chapter 4 Flashcards

6% Chapter 4

1
Q

What is the free look period for a replacement policy?

A

20 days

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2
Q

Do whole life policy premiums increase with age?

A

No
Whole life policy premiums are based on issue age only and remain level for the life or until the end of the premium period

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3
Q

How long is the payment on a straight whole life policy?

A

The payment is for life and endows at age 100

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4
Q

When does a joint life policy pay?

A

Pays entire face amount upon 1st death only

1st to die

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5
Q

What’s the maximum coverage for a group like policy to avoid tax liability?

A

$50,000 is the maximum and employer can pay for a group live policy without creating a tax liability

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6
Q

How long does a group member have to convert his coverage after leaving the group?

A

31 days

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7
Q

Which policy stays in effect without premium payment as long as there is a catch value?

A

Universal life

Premiums not required as long as cash value will cover the expense

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8
Q

Which is more expensive a joint life Or the purchase of 2 separate individual whole life policies?

A

The premiums for joint life is less than the combined premiums of 2 individual policies

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9
Q

What policy provides protection after the premium period has ended?

A

Limited pay whole life.

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10
Q

When does a survivorship or a second to die policy pay?

A

Survivor ship or 2nd to die policy covers 2 people only pays on the 2nd death

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11
Q

What is a key employee life insurance policy?

A

The business is the applicant and policy holder as well as the beneficiary and the employee is insured

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12
Q

What is the coverage amount of life insurance policy called?

A

Face value or death benefit

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13
Q

What are the types of life insurance policies?

A 
Term life 
Whole life 
Flexible premium 
Specialized 
Group life
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14
Q

What are 3 types of term insurance?

A

Level
Decreasing
Increasing
** Regardless of plan..Premiums always remain level for the term of coverage **

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15
Q

What are the 2 types of level term insurance?

A

Renewable

Convertible

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16
Q

What is the benefit of a renewable term policy?

A

Renewable without proof of insurability - Guaranteed renewable based on current age rated

17
Q

What is the attained age?

A

The current age at time of renewal

18
Q

What is the benefit of a convertible term policy?

A

Policy can be converted to whole life without evidence of insurability.

19
Q

What is a level premium term?

A

The policy has a level premium for the term of coverage

20
Q

What is decreasing term insurance?

A

Palace recovered to decrease his overtime until it gets to 0

Most affordable

21
Q

What are 2 benefits of whole life insurance?

A

Guaranteed death benefit and cash value

22
Q

What is a continuous premium or a straight whole life?

A

Premiums paid until insured dies or turns 100

Lowest premiums

23
Q

What is a limited payment life?

A

Payments for a limited period (10, 15, 20 years) or to an age such as 65 then it’s considered paid up no further payments

24
Q

What is single premium life?

A

Policy is paid with one single premium.
Most expensive
Surrender charge if withdrawals within the 1st 7 to 10 years

25
Q

Can premiums or payments be changed during during a whole life policy?

A

No

26
Q

What are the 2 types of lexible premium policies?

A

Adjustable life

Universal life

27
Q

What can be changed on an adjustable life insurance policy?

A

Policy owner can change premium’space amount or basic type of insurance
May require proof of insurability

28
Q

What is the universal life insurance policy?

A

Policy owner can increased premiums
reduce premiums or
pay no premiums as long as there’s enough cash in the policy to cover the up the cost of the policy

29
Q

What are the 3 components to a universal life policy?

A

Morality
Interest
Expenses
The 3 are unbundled for flexibility

30
Q

What are the 2 types of rates a universal life policy guarantees?

A

Guaranteed rates

Current rates

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