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Life Insurance > Type Of Life Policies > Flashcards

Type Of Life Policies Flashcards

1
Q

What is the purpose of establishing the target premium for a Universal life policy?

A

To prevent the policy from lapsing

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2
Q

When does an adjustable life policy accumulate cash value?

A

When the premiums paid are more than the cost of the policy

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3
Q

If the annuitant died before the annuitization period starts, what will the beneficiary receive?

A

Either the amount paid into the annuity or the cash value, whichever is greater

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4
Q

What are the two phases of an annuity

A

Accumulation and annuitization (or pay-in or pay-out)

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5
Q

What happens to the premium in an annually renewable term life policy?

A

The premium increase with each renewal

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6
Q

What universal life option has a gradually increasing cash value and a level death benefit

A

option A

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7
Q

What type of licenses is/are required to sell variable annuities?

A

Life insurance and securities license

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8
Q

In flexible premium payment annuities, the term flexible refers to what?

A

amount of premium

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9
Q

What type of premium is charged on a straight life policy?

A

A level premium for the life of the insured

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10
Q

How soon can income payments begin in an immediate annuity?

A

No later than 1 year from the time of annuity purchase

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10
Q

If the annuitant died during the accumulation period, who will receive the annuity benefits?

A

Beneficiary

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11
Q

In an annuity, the accumulation money is converted into a stream of income during which phase?

A

Annuitization period

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12
Q

How long will a life annuity with a 15-year period certain pay?

A

Life of annuitant unless they die within the first 15 years of annuitization period; then the payments will last for 15 years

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12
Q

In a joint life policy, when is the death benefit paid?

A

Upon first death

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12
Q

What type of annuity can be purchased with a single premium?

A

Immediate annuity

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13
Q

What type of life insurance offers an applicant a cash value element?

A

Permanent insurance (Whole life)

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14
Q

What type of insurance would preform the function of cash accumulation?

A

Whole life

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14
Q

What annuity settlement option provides income payments to the annuitant for the duration of their life, and also guarantees payment for a specified number of years?

A

Life income with period certain

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15
Q

Under option B in a universal life policy, what happens to the death benefit?

A

Death benefit increases each year by the amount of the cash value increases

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15
Q

Whole life policies provide protection until the insured reaches what age?

A

100

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16
Q

What type of life insurance provides permanent protection?

A

Whole life

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17
Q

What type of life insurance policy offers pure death protection?

A

Term

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18
Q

What type of life insurance is life paid-up at age 65?

A

Limited-pay whole life

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19
Q

Who receives income payments from an annuity

A

Annuitant

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20
Q

What are the death benefit options in universal life policies?

A

Option A: Level death benefit
Option B: Increasing death benefit

21
Q

An annuity purchased with multiple payments that begin income payments after one year from the moment of purchase is known as what type of annuity?

A

Flexible premium deferred annuity

22
Q

When would a 20-pay whole life policy endow?

A

When insured reaches 100

23
Q

The death protection component of a universal life policy is expressed as what type of coverage?

A

Annually renewable term

24
Q

With a single premium deferred annuity, when will the annuity payments become available?

A

No sooner that 1 year after the annuity purchase

25
Q

Morality tables are used by insurance companies to predict what?

A

Life expectancy and the death rates

25
Q

If there is no name beneficiary for the annuity benefits, to which entity will the benefits be paid?

A

Annuitants estate

26
Q

What does the term “level” refer to in level term insurance?

A

Face amount

27
Q

An individual has a contract that will provide him with a certain amount of income for the rest of his life. However, this is not a life insurance policy/ what type of contract does this person have?

A

Annuity

28
Q

How is the premium determined in a joint life insurance policy?

A

Premium based on average age of insureds

29
Q

Can a business or a corporation be an annuitant?

A

No, an annuitant must always be a natural person

30
Q

What type of whole life insurance policy generates immediate cash value?

A

Single premium whole life?

31
Q

Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?

A

Annuitant receives payments during annuitization; beneficiary receives benefits after annuitants death

31
Q

What type of annuity is suitable for someone who wants to select benefit option that will pay the largest amount for as long the annuitant lives?

A

Straight life

32
Q

who is entitles to the cash values in a life insurance policy?

A

Policyowner

33
Q

If an annuity provides a set amount if income for two or more persons with the income ceasing upon first death, what type of annuity is that?

A

Joint life

33
Q

Who bears the investment risk in a fixed annuity?

A

Insurer

34
Q

A whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy?

A

Limited-pay whole life

34
Q

In variable universal life insurance, to what policy component does the term “variable” refer?

A

cash value and death benefit

35
Q

why are policy loans not available on term insurance?

A

No cash value to borrow against?

36
Q

What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insurance age 100?

A

Single premium whole life

36
Q

What elements of an adjustable life policy can be changed by the policyowners?

A

The amount, payment period of premium, face amount, and period for protection

37
Q

What policy component must decrease in decreasing term insurance?

A

Face amount

37
Q

Whose life expectancy is taken into consideration in an annuity contract?

A

Annuitant

38
Q

A policy states that it will pay a specified face amount if the insured dies during the 20-year premium-paying period and nothing if death occurs after the 20-year period. What type of policy is this?

A

20-year level term

39
Q

What type of annuity credits its interest based upon an index such as S&P 500?

A

Equity indexed annuity

40
Q

An individual has just borrowed $10,000 non a %-year note from his bank. the note is due in installments. What type io life insurance policy would be best suited to this situation?

A

Decreasing term

41
Q

What happens to the cash value when a whole life insurance policies matures?

A

Cash value is paid to the policy owner

41
Q

What type of annuity requires an agent to have securities license?

A

Variable annuity

42
Q

Whole life insurance policies mature when the insured reaches the age 100. If the insured dies at age 80, and there is no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?

A

Full death benefit

42
Q

What is the main reason purchasing an annuity?

A

To provide income that the annuitant cannot outlive

43
Q

In annually renewable term policies, what is the annual premium based upon?

A

Insured’s attained age

43
Q

What type of life insurance is best suited to cover a mortgage?

A

Decreasing term

44
Q

What are the two classifications of annuities according to the time when annuity payments begin?

A

Immediate and deferred

45
Q

What is the difference between a single premium and a flexible premium payment options in a deferred annuity?

A

The number of payments that purchased the annuity

45
Q

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for what time period?

A

For 20 years or until the insureds death, whichever occurs first

46
Q

In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?

A

Universal Life

47
Q

During partial withdrawal from a life insurance policy, what portion, if any, will be taxed?

A

Interest earned on the withdrawn cash value

Life Insurance (5 decks)

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