Life Policies Flashcards
An insurance policy that can also be classified as a securities product is called
Variable life
A life policy that has premiums that are lower than the normal during the early years is called
Modified life
Which statement regarding the cash value of a whole life insurance policy is correct?
Available to the policyowner when policy has been surrendered
Who normally pays the premiums for group credit life insurance?
Borrower
Which is an accurate description of the premium in a graded premium life insurance policy?
Annual increases in premium for a stated number of years then remains level
Assets that back the non-guaranteed values of variable life insurance products are held in which account?
Separate account set up by the insurer
Which statement concerning a decreasing term life policy is accurate?
Face amount decreases over the policy period
Straight whole life insurance can be accurately described in all of these statements EXCEPT
Policy protection normally expires at age 65
A survivorship life insurance policy usually covers how many lives?
2
When does the insured stop making payments under a thirty-payment whole life policy?
At the time of death or 30 years after the policy inception, whichever comes first
Which of the following is a TRUE statement regarding universal life insurance?
Policy indicates how much of each premium is used toward company expenses
Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured’s death?
30-year decreasing term
A material change in a modified endowment contract (MEC) results in
The seven pay test, adjusted for cash value, applies again
Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection?
Fluctuate with changes in the cash account
What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?
Joint life
Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?
Policy loans
What kind of life policy typically offers mortgage protection?
Decreasing term policy
These are all accurate statements regarding universal life insurance EXCEPT
Policy loans are not permitted
What is a juvenile life insurance policy?
A life policy that covers the life of a minor
Which of these policies is considered a whole life policy?
Single premium life
Which statement regarding a single premium life insurance policy is NOT correct?
Additional premiums may be required under certain conditions
Which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for the duration of the policy
How are level-term policies able to provide level premiums?
Premiums are averaged over the term of the policy
What would be considered an advantage of purchasing term life insurance?
The initial premium is lower compared to an equivalent amount of whole coverage
