Types Of Life Policies Flashcards
What policy component must decrease in decreasing term insurance?
Face amount
If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?
Annuitant’s estate
Whole life policies provide protection until the insured reaches what age?
Age 100
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant’s death
Why are policy loans not available on term insurance?
There is no cash value to borrow against
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?
For 20 years or until the insured’s death, whichever occurs first
What does the term “level” refer to in level term insurance?
Face amount
If the annuitant dies before the annuitization period starts, what will the beneficiary receive?
Either the amount paid into the annuity or the cash value, whichever is greater
A whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy?
Limited-pay whole life
An individual has just borrowed $10, 000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation?
Decreasing term
With a single premium deferred annuity, when will the annuity payments become available?
No sooner than 1 year after the annuity purchase
What type of life insurance policy provides permanent protection?
Whole life
What type of life insurance is best suited to cover a mortgage?
Decreasing term
Who receives income payments from an annuity?
Annuitant
What type of whole life insurance policy generates immediate cash value?
Single premium whole life
How is the premium determined in a joint life insurance policy?
The premium is based on the average age of the insureds
Who is entitled to the cash values in a life insurance policy?
The policyowner
Under Option B in a universal life policy, what happens to the death benefit?
Under Option B, the death benefit increases each year by the amount of the cash value increases
In annually renewable term policies, what is the annual premium based upon?
The insured’s attained age
What are the death benefit options in universal life policies?
Option A - level death benefit
Option B - increasing death benefit
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?
Annuity
What type of life insurance offers an applicant a cash value element?
Permanent insurance (usually, whole life)
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What is the difference between a single premium and a flexible premium payment options in a deferred annuity?
The number of payments that purchase the annuity