Podcast
Questions and Answers
Which of the following policies is characterized by a guaranteed minimum death benefit?
Which of the following policies is characterized by a guaranteed minimum death benefit?
Credit life insurance is typically issued with which of the following types of coverage?
Credit life insurance is typically issued with which of the following types of coverage?
Which of the following types of policies will provide the growth of cash value?
Which of the following types of policies will provide the growth of cash value?
When is the face amount paid under a Joint Life and Survivor policy?
When is the face amount paid under a Joint Life and Survivor policy?
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Which of these is NOT guaranteed by Whole Life insurance policies?
Which of these is NOT guaranteed by Whole Life insurance policies?
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A(n) ____________ term life policy is normally used when covering an insured's mortgage balance.
A(n) ____________ term life policy is normally used when covering an insured's mortgage balance.
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What happens under a Graded Premium Whole Life policy?
What happens under a Graded Premium Whole Life policy?
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Premiums are payable for as long as there is insurance coverage in force in a Straight Life policy.
Premiums are payable for as long as there is insurance coverage in force in a Straight Life policy.
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K purchased a Life insurance policy known as a(n) __________ life policy.
K purchased a Life insurance policy known as a(n) __________ life policy.
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What type of life insurance gives the greatest amount of coverage for a limited period of time?
What type of life insurance gives the greatest amount of coverage for a limited period of time?
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A company that owns a life insurance policy on one of its key employees may do all the following except:
A company that owns a life insurance policy on one of its key employees may do all the following except:
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Which of these policies should Q purchase for the greatest amount of protection for a temporary period?
Which of these policies should Q purchase for the greatest amount of protection for a temporary period?
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What advantage does the renewability feature give to a term policy?
What advantage does the renewability feature give to a term policy?
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What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit?
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit?
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All of these are characteristics of an Adjustable Life policy EXCEPT: Face amount can be adjusted using policy dividends.
All of these are characteristics of an Adjustable Life policy EXCEPT: Face amount can be adjusted using policy dividends.
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What type of life policy covers two people and pays upon the death of the last insured?
What type of life policy covers two people and pays upon the death of the last insured?
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What type of policy provides cash values that fluctuate according to the performance of common stocks?
What type of policy provides cash values that fluctuate according to the performance of common stocks?
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Which policy should N purchase for level premiums, permanent protection, and be paid-up at retirement?
Which policy should N purchase for level premiums, permanent protection, and be paid-up at retirement?
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Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?
Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of good health?
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Under a Renewable Term policy, how is the renewal premium calculated?
Under a Renewable Term policy, how is the renewal premium calculated?
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All of these statements about Equity Indexed Life Insurance are correct EXCEPT: The premiums can be lowered or raised, based on investment performance.
All of these statements about Equity Indexed Life Insurance are correct EXCEPT: The premiums can be lowered or raised, based on investment performance.
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What applies when exchanging a term policy for a whole life policy without providing proof of good health?
What applies when exchanging a term policy for a whole life policy without providing proof of good health?
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Life insurance that covers an insured's whole life with level premiums over a limited time is called:
Life insurance that covers an insured's whole life with level premiums over a limited time is called:
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What does a Face Amount Plus Cash Value Policy pay upon the insured's death?
What does a Face Amount Plus Cash Value Policy pay upon the insured's death?
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At what point does a Whole Life Insurance policy endow?
At what point does a Whole Life Insurance policy endow?
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What type of life policy covers two lives and pays the face amount after the first one dies?
What type of life policy covers two lives and pays the face amount after the first one dies?
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Term insurance expires at the end of the policy period.
Term insurance expires at the end of the policy period.
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Which policy best fits K's need for permanent life insurance with the MOST protection per dollar of annual premium?
Which policy best fits K's need for permanent life insurance with the MOST protection per dollar of annual premium?
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Which feature of a group Term Life policy allows an individual to leave the group and continue insurance without evidence of insurability?
Which feature of a group Term Life policy allows an individual to leave the group and continue insurance without evidence of insurability?
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A ___________ life policy offers the owner investment in products such as money-market funds, long-term bonds and equities.
A ___________ life policy offers the owner investment in products such as money-market funds, long-term bonds and equities.
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All of these are characteristics of an adjustable life policy, except: Face amount can be adjusted using policy dividends.
All of these are characteristics of an adjustable life policy, except: Face amount can be adjusted using policy dividends.
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Under a Renewable Term policy, how is the renewal premium calculated?
Under a Renewable Term policy, how is the renewal premium calculated?
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If a 10-Year Term Life policy contains a Renewability provision, the policy will renew:
If a 10-Year Term Life policy contains a Renewability provision, the policy will renew:
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What does the word 'straight' indicate in the phrase 'Straight Life'?
What does the word 'straight' indicate in the phrase 'Straight Life'?
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What kind of policy does P own if he has a $25,000 Life Policy that pays the face amount if he lives to age 70?
What kind of policy does P own if he has a $25,000 Life Policy that pays the face amount if he lives to age 70?
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Where do the investment gains from a Universal Life Policy usually go?
Where do the investment gains from a Universal Life Policy usually go?
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A variable insurance policy guarantees a return on its investment accounts.
A variable insurance policy guarantees a return on its investment accounts.
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What is the most important factor when determining whether to convert term insurance?
What is the most important factor when determining whether to convert term insurance?
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Which type of policy should an architecture firm purchase on its project manager?
Which type of policy should an architecture firm purchase on its project manager?
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What type of life policy has a death benefit that adjusts periodically and is written for a specific period?
What type of life policy has a death benefit that adjusts periodically and is written for a specific period?
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How does a typical Variable Life Policy investment account grow?
How does a typical Variable Life Policy investment account grow?
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What kind of policy does D need if they want coverage for a limited time with the lowest premium?
What kind of policy does D need if they want coverage for a limited time with the lowest premium?
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What kind of policy has a premium that stays fixed for the first 5 years and then increases in year 6?
What kind of policy has a premium that stays fixed for the first 5 years and then increases in year 6?
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S is covered by a whole-life policy. What insurance product can cover his children?
S is covered by a whole-life policy. What insurance product can cover his children?
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Which type of Term Life policies most likely contains a Renewability feature?
Which type of Term Life policies most likely contains a Renewability feature?
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Which statement is correct regarding the premium payment schedule for whole life policies?
Which statement is correct regarding the premium payment schedule for whole life policies?
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Variable Life products require a producer to hold which licenses?
Variable Life products require a producer to hold which licenses?
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Which of the following is considered an element of a Variable Life Policy?
Which of the following is considered an element of a Variable Life Policy?
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What would be a correct statement made by a producer regarding a Whole Life policy that accumulates cash faster than Straight Life?
What would be a correct statement made by a producer regarding a Whole Life policy that accumulates cash faster than Straight Life?
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Which statement about Equity Indexed Life Insurance is incorrect?
Which statement about Equity Indexed Life Insurance is incorrect?
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Y purchased $100,000 worth of permanent protection on himself. What type of policy did Y purchase?
Y purchased $100,000 worth of permanent protection on himself. What type of policy did Y purchase?
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What type of insurance offers permanent life coverage with premiums that are payable for life?
What type of insurance offers permanent life coverage with premiums that are payable for life?
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K and his wife purchase a Family Policy. What situation will NOT pay a death benefit?
K and his wife purchase a Family Policy. What situation will NOT pay a death benefit?
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What type of policy would offer a 40-year old the quickest accumulation of cash value?
What type of policy would offer a 40-year old the quickest accumulation of cash value?
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A(n) _________ Life policy offers the owner investments in products such as money-market funds, long-term bonds and equities.
A(n) _________ Life policy offers the owner investments in products such as money-market funds, long-term bonds and equities.
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The option that provides an additional death benefit for a limited time at the lowest possible cost is called a(n):
The option that provides an additional death benefit for a limited time at the lowest possible cost is called a(n):
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Which provision prevents an insurer from changing the terms of the contract with the policy owner?
Which provision prevents an insurer from changing the terms of the contract with the policy owner?
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Which life insurance rider allows the applicant to have excess coverage?
Which life insurance rider allows the applicant to have excess coverage?
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What action will the insurer take if N misses the required premium payment due August 1 and dies September 15?
What action will the insurer take if N misses the required premium payment due August 1 and dies September 15?
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What does the incontestable clause allow an insurer to do?
What does the incontestable clause allow an insurer to do?
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What kind of rider is attached to a life insurance policy that ensures the premium will be paid if the insured becomes disabled?
What kind of rider is attached to a life insurance policy that ensures the premium will be paid if the insured becomes disabled?
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What are dividends paid from a life insurance policy classified as?
What are dividends paid from a life insurance policy classified as?
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From which dividend option can a policyowner generate taxable income?
From which dividend option can a policyowner generate taxable income?
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What does a cost of living rider provide to the insured?
What does a cost of living rider provide to the insured?
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P purchases a $50,000 term life insurance policy in 2005. What will the insurer pay to P's beneficiary?
P purchases a $50,000 term life insurance policy in 2005. What will the insurer pay to P's beneficiary?
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Which provision in a life insurance policy defines who may select options and also designate a beneficiary?
Which provision in a life insurance policy defines who may select options and also designate a beneficiary?
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K pays on a $20,000 20-Year Endowment policy for 10 years. What will the insurance company pay the beneficiary?
K pays on a $20,000 20-Year Endowment policy for 10 years. What will the insurance company pay the beneficiary?
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S buys a $10,000 Whole Life policy and the insurer pays the beneficiary $10,500 after S's death. What kind of rider did S include on the policy?
S buys a $10,000 Whole Life policy and the insurer pays the beneficiary $10,500 after S's death. What kind of rider did S include on the policy?
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The advantage of reinstating an original life policy is that the premiums are based on a younger age.
The advantage of reinstating an original life policy is that the premiums are based on a younger age.
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Which types of policies may NOT have the Automatic Premium Loan provision?
Which types of policies may NOT have the Automatic Premium Loan provision?
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What will the beneficiary receive if the insured dies during the Grace Period?
What will the beneficiary receive if the insured dies during the Grace Period?
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Past-due interest on a policy loan is added to the total debt.
Past-due interest on a policy loan is added to the total debt.
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What additional benefits does the Accidental Death and Dismemberment (AD&D) provision provide?
What additional benefits does the Accidental Death and Dismemberment (AD&D) provision provide?
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What does the insuring agreement in a life insurance contract establish?
What does the insuring agreement in a life insurance contract establish?
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All of these statements about the waiver of premium provision are correct, EXCEPT the insured must be eligible for social security disability for a claim to be accepted.
All of these statements about the waiver of premium provision are correct, EXCEPT the insured must be eligible for social security disability for a claim to be accepted.
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Study Notes
Life Insurance Types and Characteristics
- Life insurance forms an estate immediately upon an insured's death.
- Variable Life policies guarantee a minimum death benefit.
- Credit life insurance typically uses a Decreasing Term coverage structure.
- Whole life insurance offers various types including 20-pay Life for cash value growth, and Straight Life with premiums for lifetime coverage.
- Joint Life and Survivor policies pay out on the death of the last insured.
- Universal Life insurance can terminate if premiums do not match interest expectations.
- Term life insurance provides the most coverage for a limited time and expires at the end of the policy period.
Policy Features and Provisions
- Graded Premium Whole Life policies have increasing premiums initially, stabilizing later.
- Renewability features allow term policies to extend coverage based on the insured's attained age without proving insurability.
- Conversion provisions permit changing term life to permanent policies without health proof.
- Whole Life insurance is also known as Straight Life, linking to the duration of premium payments.
- Limited Pay Life policies offer permanent coverage with premiums due for a limited period.
Additional Insurance Concepts
- Family Maintenance Policies provide both monthly income for 30 years and a lump sum after that term.
- The Face Amount Plus Cash Value policy pays the face amount and the accrued cash value upon death.
- Equity Indexed Life Insurance premiums cannot fluctuate based on investment performance.
- Key Person insurance protects businesses against the loss of essential employees.
- Policy loans have implications, including adding past-due interest to the total debt.
Riders and Clauses
- Riders such as Waiver of Premium ensure coverage continues if the insured becomes disabled.
- Accidental Death and Dismemberment riders offer additional benefits under certain conditions.
- Return of premium riders refund premiums if the insured dies before a specific age.
- The Entire Contract Provision safeguards against changes outside the policy documentation.
Claims and Benefits
- Claims may be denied if premiums were not current at the time of death.
- Grace Periods allow for death benefits to be paid minus overdue premiums if the insured dies during this window.
- Insurers generally guarantee the premium payments and death benefits as specified, with nuances based on policy type and rider inclusion.
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Description
Test your knowledge on life insurance concepts in Chapter 3. This quiz covers various types of life insurance policies, including variable life and credit life insurance. Challenge yourself with questions about their definitions and features.
