Types Of Life Policies Flashcards
Why is an equity indexed annuity considered to be a fixed annuity?
It has a guaranteed minimum interested rate
Variable whole life insurance is based on what type of premium?
Level fixed
What is a short-term annuity that limits the amount paid to a specific fixed period or until a specified fixed amount is liquidated?
Annuity certain (allows the annuitant to select the time period or amount of the benefits to be paid out. Under the installments for a fixed period, distribution begins on a specific date and stop on a specific date)
The premium of a survivorship life policy compared to join would be
A) half the amount
B) lower
C) higher
D) as high
B) Lower -( since the benefit is not paid until the last death, the joint life expectancy is “extended” resulting in a lower premium)
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity. She wants to select the benefit option that will pay the most monthly as long as she lives. What should you recommend?
Straight life (annuity payments cease at death but because there are no other guarantees that might incur additional charges, she will receive the most monthly)
Under straight life annuity, if the annuitant dies before the principal is paid off the beneficiary will receive ____________?
Nothing; the payments will cease
The death protection component of universal life policy is expressed as what type of coverage?
Annually renewable term
In what type of life insurance policy can the policy owner skip premium payments without the policy lapsing?
Universal life
A policy states it will pay a specified face amount if the insured dies during the 20 year premium paying period and nothing if the death occurs after the 20 year period. What type of policy is this?
20 year level term
A whole life policy that requires the policy owner only pays premiums for a specified number of years is know as what kind of policy?
Limited pay whole life
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?
Life income with period certain
What type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount only for as long as the annuitant lives?
Straight life
What type of life policy is Life paid up at age 65?
Limited pay whole life
What type of whole life insurance policy generates immediate cash value?
Single premium whole life
When does an adjustable life policy accumulate cash value?
When the premiums paid are more than the cost of the policy