Type Of Insurance Policies

Question 1

Industrial life insurance

Answer 1

Very small face amounts 1000 to 2000 paid weekly made for burial coverage 

Question 2

Ordinary life insurance

Answer 2

Is life insurance of commercial companies, several types of individual life insurance such as temporary (term), permanent (whole)

Question 3

Group life insurance

Answer 3

Written for members of a group, such as place of employment association, or a union coverage is provided under one master contract

Question 4

Term life insurance

Answer 4

Greatest amount of coverage for period of time term life is the cheapest type of pure life insurance due to having a termination date and not having any cash value it will always be cheaper than (whole life) with same face value

Question 5

Level term

Answer 5

Life insurance written to cover a need for a spec specified. Of time with the lowest premiums is called level term.

Question 6

Decreasing term

Answer 6

Are usually written for mortgages or other debt that decreases overtime until it is paid off. (Policies are over when Dad is paid off.)

Question 7

Credit policies

Answer 7

Are typically purchase using a decreasing term life insurance policy with the term match to the length of the loan. And the decreasing insurance amount match to the declining loan balance.

Question 8

Increasing term

Answer 8

Is term life insurance that provides an increasing face amount overtime based on specific amounts or eight percentage of the original face amount

Question 9

Convertible term

Answer 9

Is a provision that allows policy owners to convert their term insurance into permanent policies without showing proof of insurability convertible term provides temporary coverage that may be changed to permanent coverage without evidence of insurability

Question 10

Renewable term

Answer 10

Term insurance that guarantees the insured, the right to continue term coverage after expiration of the initial palsy. Without having to prove insurability. 

Question 11

Annual renewable term

Answer 11

His term coverage that provides a level face amount that renews annually. This type of coverage is guaranteed renewable annually, without proof of insureability.

Question 12

Term rider

Answer 12

Type of insurance product, which covers children under their parents life insurance policy

Question 13

Whole life insurance

Answer 13

Provides death benefits for the entire life of the insured (compared to buying, like buying a house)

Question 14

With whole life-straight life insurance,

Answer 14

Premiums are payable throughout the insured’s lifetime and coverage continues until the insured’s death. Said differently premiums are payable as long as coverage is in force.

Question 15

With whole life - limited pay

Answer 15

The coverage remains on a limited pay life policy until age 100 or death whichever happens first even though the premium payments are limited to a certain. The insurance protection extends until the insured’s death or to the age of 100


Question 16

Whole life - modified

Answer 16

Is a policy where the premium stay fixed for the first five years and then increases in year six and stays level for the remaining of the policy. Modified whole life has all of the same features of any other whole life except the insurance company cuts you a break on premium for the first few years

Question 17

Whole life, modified endowment contract (MEC)

Answer 17

Is best described as a policy that exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract a MEC does not meet the seven pay test and is considered over funded according to the IRS, for that reason the policy will lose favorable tax retreatment

Question 18

Joint life policy

Answer 18

Covers the lives of two individuals and save on premium cost by averaging the ages of the two insured’s. Jointly policies paid the face amount after the first person covered on the policy dies. This is similar to a joint checking account. The policy is shared between two people and when one person the other receives the entire account.

Question 19

Joint survivor or last survivor policy

Answer 19

 cover the lives of two individuals and save on premium cost by averaging the ages of two insureds joint life survivor or last survivor policies only pay the death benefit upon the death of the last insured person 

Question 20

Family maintenance policy

Answer 20

He is a monthly income from the date of death of the insured to the end of the pre-selected. The payment of the face amount of the policy is payable at the end of such pre-selected period.

Question 21

Family income policies

Answer 21

Pay an income beginning at the insured death and continues for a period specified from the date of the policy issue

Question 22

Adjustable life policy

Answer 22

Owner is usually looking for a policy, offering flexible premiums as financial needs And objectives change the policy owner can make adjustments to the premium and or face amount of an adjustable life insurance policy

Question 23

Universal life insurance policy

Answer 23

Incorporate flexible premiums and an adjustable death benefit the investment gain from a universal life policy usually goes toward the cash value

Question 24

Variable life insurance policy

Answer 24

Require a producer to have a proper FINRA, and national Association of securities dealers NASD securities registration prior to selling any variable policy contract, whether it be life insurance or an annuity as they include regulated securities

Question 25

Variable, universal whole life, VUL

Answer 25

The policy owner controls the investment of cash value and select the timing and amount of premium payments, variable, universal life policies, give a policy owner, the best of both variable life and universal life if a policy owner was looking for a policy that allowed them to Control how much and when premium was due, what investment accounts were used for funding and where the returns from those investments accounts went, they would be looking for a variable universal life policy

Question 26

Equity index universal life insurance

Answer 26

Equity index, universal life, insurance, or equity index life combines most of the features, benefits and security of traditional life insurance with the potential of earned interest based on the upward movement of the equity index unlike a traditional whole life plan this plan allows policyholders to link accumulation values to an outside equity index like S&P 500

Question 27

Investor or (stranger) originated life insurance policy

Answer 27

When the insured dies the policy owner, (investor) benefits. In normal circumstances it is a beneficiary with insurable interest to benefits from the death of an insured.

Question 28

Cash value

Answer 28

Is the equity amount or savings accumulated in a whole life policy?

Question 29

Endowment policy

Answer 29

Is a contract, providing for payment of the face amount at the end of a fixed period at a specified age of the insured, or at the insured death before the end of the stated period

Question 30

Face amount plus cash value policy

Answer 30

Is a contract that promises to pay at the Insured death, the face amount of the policy, plus a sum equal to the policies cash value

Question 31

Juvenile insurance

Answer 31

Is written on the lives of children, who are within specified age limit, and generally under parental control

Question 32

Non-medical life insurance

Answer 32

Typically does not require a medical exam and tend to be more expensive than medically under written policies

Question 33

Target premium

Answer 33

Is a suggested premium used in universal life policies. It does not guarantee there will be adequate funds to maintain the policy to any time, especially to life.