Types Of Life Policies Flashcards
Variable whole life insurance is based on what type of premium?
Level fixed
Variable whole life insurance is a level fixed premium investment-based product
Who bears all of the investment risk in a fixed annuity?
The insurance company
All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%
Evidence of insurability is not required
Most term policies contain a convertibility option
Upon conversion, the premium for the permanent policy will be based upon attained age
Upon conversion, the death benefit of the permanent policy will be reduced by 50%
To sell life insurance policies, an agent must receive all of the following EXCEPT
A life insurance license
SEC registration
FINRA registration
A Securities license
SEC registration
The term “fixed” in a fixed annuity refers to all of the following EXCEPT
Amount and length of payments
Death benefit
Guaranteed rate of interest
Equal annuity payments
Death benefit
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured’s age 100 is called
Single premium whole life
The LEAST expensive first-year premium is found in which of the following policies?
Increasing Term
Decreasing Term
Level Term
Annually Renewable Term
Annually Renewable Term
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Life annuity with period certain
Increasing term
Limited pay whole life
Interest-sensitive whole life
Limited pay whole life
Equity indexed annuities
Seek higher returns
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
What are the two components of a universal policy?
Insurance and cash account
The death benefit in a variable universal life policy
Depends on the performance of a separate account
Which statement is NOT true regarding a Straight Life policy?
It has the lowest annual premium of the three types of Whole Life policies
It’s premium steadily decreases over time, in response to its growing cash value
The face value of the policy is paid to the insured at age 100
It usually develops cash value by the end of he third policy year
It’s premium steadily decreases over time, in response to its growing cash value
Which of the following policies would be classified as a traditional level premium contract?
Adjustable Life
Universal Life
Variable Universal Life
Straight Life
Straight Lifef
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Annuitization period
Pay-out period
Liquidation period
Depreciation period
Depreciation period
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy
Required a premium increase each renewal
All of the following are true of an annuity owner EXCEPT
The owner has the right to name the beneficiary
The owner is the party who may surrender the annuity
The owner must be the party to receive benefits
The owner ay the premiums on the annuity
The owner must be the party to receive benefits
Which of the following is called a “second-to-die” policy?
Survivorship life
Family income
Juvenile Life
Joint life
Survivorship Life
The type of policy that can be changed from one that does not accumulate cash value to the that does is a
convertible term policy
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Variable life
Adjustable life
Universal life
Flexible life
Universal life
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 20 years or until death, whichever occurs first
A married couple owns a permanent policy which covers both of their live and pays the death benefit only upon the death of the first insured. Which policy is that?
Joint Life Policy
Which policy component decreases in decreasing term insurance?
Face amount
