Policy Types

Question 1

P owns a $25,000 Life Policy that pays the face amount to him if he lives to age 70, or to his beneficiary if he dies before age 70. What kind of policy does P own?

Answer 1

Endowment at Age 70

Question 2

K purchased a Life insurance policy in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much-higher premium is paid because of falling interest rates. This type of policy is known as

Answer 2

Universal

Question 3

I is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which policy best fits her needs?

Answer 3

Straight Life

Question 4

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Answer 4

Family Maintenance Policy

Question 5

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Answer 5

Variable Life

Question 6

A life policy that contains a monthly mortality charge as well as self-directed investment choices is

Answer 6

Variable Universal Life

Question 7

Under a(n) _____ policy, cash values are determined by interest rates

Answer 7

Interest Sensitive Whole Life

Question 8

A life insurance policy that provides a policyowner with cash value along with a level face amount is

Answer 8

Whole Life

Question 9

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?

Answer 9

Whole Life

Question 10

What kind of premium does a Whole Life policy have?

Answer 10

Level

Question 11

Which Term Life policy most likely contains a Renewability feature?

Answer 11

10 Year Convertible Term

Question 12

S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but still protect the principal with a minimum level or risk. Which product would S be advised to purchase?

Answer 12

Equity index insurance

Question 13

True or false: death benefit can usually be adjusted in a whole life policy

Answer 13

False

Question 14

True or false: level term policies may be renewable

Answer 14

True

Question 15

True or false: with Equity Indexed Life insurance, the premiums can be lowered or raised, based on investment performance

Answer 15

False

Question 16

True or false: Whole Life insurance policies are contractually guaranteed to provide partial withdrawal features beyond a surrender charge period

Answer 16

False

Question 17

This type of policy combines term life insurance with an investment element

Answer 17

Universal Life

Question 18

The investment gains from a Universal Life Policy usually go toward

Answer 18

The cash value

Question 19

True or false: a Variable Whole Life policy provides a minimum guaranteed death benefit

Answer 19

True

Question 20

True or false: the face amount of an Adjustable Life policy can be adjusted using policy dividends

Answer 20

False

Question 21

The combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy

Answer 21

Decreasing

Question 22

True or false: a Variable Life policy has a fixed, level premium

Answer 22

True