Life Policies

Question 1

An insurance policy that can also be classified as a securities product is called

Answer 1

Variable life

Question 2

A life policy that has premiums that are lower than the normal during the early years is called

Answer 2

Modified life

Question 3

Which statement regarding the cash value of a whole life insurance policy is correct?

Answer 3

Available to the policyowner when policy has been surrendered

Question 4

Who normally pays the premiums for group credit life insurance?

Answer 4

Borrower

Question 5

Which is an accurate description of the premium in a graded premium life insurance policy?

Answer 5

Annual increases in premium for a stated number of years then remains level

Question 6

Assets that back the non-guaranteed values of variable life insurance products are held in which account?

Answer 6

Separate account set up by the insurer

Question 7

Which statement concerning a decreasing term life policy is accurate?

Answer 7

Face amount decreases over the policy period

Question 8

Straight whole life insurance can be accurately described in all of these statements EXCEPT

Answer 8

Policy protection normally expires at age 65

Question 9

A survivorship life insurance policy usually covers how many lives?

Answer 9

2

Question 10

When does the insured stop making payments under a thirty-payment whole life policy?

Answer 10

At the time of death or 30 years after the policy inception, whichever comes first

Question 11

Which of the following is a TRUE statement regarding universal life insurance?

Answer 11

Policy indicates how much of each premium is used toward company expenses

Question 12

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?

Answer 12

30-year decreasing term

Question 13

A material change in a modified endowment contract (MEC) results in

Answer 13

The seven pay test, adjusted for cash value, applies again

Question 14

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?

Answer 14

Fluctuate with changes in the cash account

Question 15

What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?

Answer 15

Joint life

Question 16

Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?

Answer 16

Policy loans

Question 17

What kind of life policy typically offers mortgage protection?

Answer 17

Decreasing term policy

Question 18

These are all accurate statements regarding universal life insurance EXCEPT

Answer 18

Policy loans are not permitted

Question 19

What is a juvenile life insurance policy?

Answer 19

A life policy that covers the life of a minor

Question 20

Which of these policies is considered a whole life policy?

Answer 20

Single premium life

Question 21

Which statement regarding a single premium life insurance policy is NOT correct?

Answer 21

Additional premiums may be required under certain conditions

Question 22

Which of the following statements about universal life insurance is NOT true?

Answer 22

Universal life insurance normally has a minimum guaranteed cash value for the duration of the policy

Question 23

How are level-term policies able to provide level premiums?

Answer 23

Premiums are averaged over the term of the policy

Question 24

What would be considered an advantage of purchasing term life insurance?

Answer 24

The initial premium is lower compared to an equivalent amount of whole coverage

Question 25

Which statement regarding an adjustable life insurance policy is NOT true?

Answer 25

Policy loans are not permitted