Questions and Answers
What is an example of a limited-pay life policy?
What statement about group life is correct?
All of the following entities regulate variable life policies except:
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
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Which Universal Life option has a gradually increasing cash value and a level death benefit?
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All other factors being equal, the least expensive first-year premium payment is found in:
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What part of an indexed whole life policy is NOT fixed?
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Which is classified as a traditional level premium contract?
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Concerning juvenile life insurance, what is true?
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15 sky divers wanted cheaper life insurance so they got together. They applied and were rejected for group life. Why?
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To sell variable life insurance policies, an agent must receive:
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Which option allows the beneficiary to receive the death benefit and cash value upon the death of the insured?
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When an employee terminates coverage under the group, how long does the coverage continue?
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Which would have an IRS-required gap between cash value and death benefit?
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Which type of insurance policy generates immediate cash value?
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Which factors aren't considered when underwriting group insurance?
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In group life insurance policy, who may not select the beneficiary?
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When an insured renews a term 5 years later, what happens to the premium?
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What is false regarding credit life insurance?
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In a survivorship life policy, when does the insurer pay the death benefit?
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What did a man discover about his 100k annually renewable term policy?
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Which best describes annually renewable term life insurance?
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Which employees under a group plan are allowed to convert to individual insurance?
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When would a 20-pay whole life policy endow?
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Who is the beneficiary in credit life insurance?
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A return of premium term life policy is written as what type of coverage?
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In an adjustable life policy, what cannot be done?
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All are correct regarding credit life insurance except:
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Which statement is not true regarding a straight life policy?
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Which is not true regarding a decreasing term policy?
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Credit life insurance insures the life of whom?
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If a life policy increases significantly in face amount or death benefit when the insured reaches a specific age, which policy is it?
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Study Notes
Limited-Pay Life Policies
- An example is the Life Paid-up at age 65, which requires premiums to be paid only until age 65.
Group Life Insurance
- Cost is influenced by the ratio of men to women within the insured group.
Regulation of Variable Life Policies
- Regulated by the Federal Government, SEC, and Insurance Department; not by the Guaranty Association.
Premiums in Survivorship and Joint Life Policies
- A survivorship life policy generally has a lower premium compared to a joint life policy.
Universal Life Options
- Option A features a gradually increasing cash value while maintaining a level death benefit.
First-Year Premiums
- The least expensive first-year premium is typically found in annually renewable term insurance.
Indexed Whole Life Policies
- Cash value growth is variable and depends on market performance, unlike the fixed components of the policy.
Traditional Level Premium Contracts
- Straight Life insurance is classified as a traditional level premium contract.
Juvenile Life Insurance
- Juvenile Life is a limited payment policy on minors, with the parent as the applicant.
Group Life Insurance Rejection
- A group of skydivers was rejected for group life as their purpose was solely to obtain insurance coverage.
Selling Variable Life Insurance
- Agents need a securities license, life insurance license, and FINRA registration, but not SEC registration.
Death Benefit Options
- Option B allows the beneficiary to receive both the death benefit and cash value upon the insured's death.
Group Coverage Continuation
- Coverage remains in force for 31 days after an employee terminates their group insurance.
IRS Requirements for Cash Value
- Universal Life Option A must maintain a gap between cash value and death benefit as per IRS regulations.
Immediate Cash Value Policies
- Single Premium Whole Life policies generate immediate cash value.
Group Insurance Underwriting
- Underwriting does not consider the insured's medical history in group insurance.
Beneficiary Selection in Group Life
- Employers cannot select beneficiaries; employees must be allowed to choose.
Term Insurance Renewals
- Premiums increase upon renewing a term policy after a period, reflecting the insured's age.
Credit Life Insurance Benefits
- Benefits are paid to the creditor, not the borrower's beneficiary.
Survivorship Life Policy Death Benefit Payment
- The death benefit is paid out upon the last death in a survivorship life policy.
Renewable Term Policy Characteristics
- Annually renewable term policies require premium increases with each renewal due to the insured's age.
Annually Renewable Term Insurance Definition
- It is characterized as level term insurance.
Employee Conversion Rights in Group Plans
- Employees insured for over five years are allowed to convert to individual insurance.
Endowment Age for Whole Life Policies
- A 20-pay whole life policy will endow at age 100.
Credit Life Insurance Beneficiary
- The beneficiary of credit life insurance is the creditor.
Return of Premium Term Life Policy
- It is described as increasing coverage.
Adjustable Life Policy Limitations
- Policyholders cannot change the investment type within an adjustable life policy.
Misconceptions about Credit Life Insurance
- It's incorrect to claim benefits are paid to the borrower's beneficiary.
Straight Life Policy Characteristics
- It is false that premiums of a straight life policy decrease over time; they remain steady.
Decreasing Term Policy Misunderstandings
- The premium amount does not decrease, it remains constant throughout the policy duration.
Credit Life Insurance Definition
- It insures the life of a debtor against outstanding debts.
Jumping Juvenile Policy
- This type of policy increases the face amount or death benefit at a specific age of the insured.
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Description
Test your knowledge on key concepts from Chapter 3 of insurance studies. This quiz covers various aspects of life policies, including limited-pay life policies and regulations of variable life insurance. Challenge yourself with these flashcard questions to reinforce your understanding.
