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Questions and Answers
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
Which of these is an element of a Variable Life policy?
Which of these is an element of a Variable Life policy?
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability?
What does a Limited-Pay Life policy have?
What does a Limited-Pay Life policy have?
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What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
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The investment gains from a Universal Life Policy usually go toward?
The investment gains from a Universal Life Policy usually go toward?
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What kind of policy does K buy where the premium stays fixed for the first 5 years, then increases?
What kind of policy does K buy where the premium stays fixed for the first 5 years, then increases?
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Life insurance that covers an insured's whole life with level premiums paid over a limited time is called?
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called?
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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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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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Which is true concerning a Variable Universal Life policy?
Which is true concerning a Variable Universal Life policy?
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F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed?
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Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
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S is covered by a whole life policy. Which insurance product can cover his children?
S is covered by a whole life policy. Which insurance product can cover his children?
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Which policy requires a producer to register with the National Association of Securities Dealers (NASD) before selling?
Which policy requires a producer to register with the National Association of Securities Dealers (NASD) before selling?
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Which statements describe a Modified Endowment Contract (MEC)?
Which statements describe a Modified Endowment Contract (MEC)?
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Term insurance has which of the following characteristics?
Term insurance has which of the following characteristics?
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What type of life insurance incorporates flexible premiums and an adjustable death benefit?
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
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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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G purchased a Family Income policy at age 40 with a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
G purchased a Family Income policy at age 40 with a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
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K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
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Additional coverage can be added to a Whole Life policy by adding a(n)?
Additional coverage can be added to a Whole Life policy by adding a(n)?
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Study Notes
Life Insurance Policies and Provisions
- Conversion Provision: Allows policyowners to exchange a term policy for a whole life policy without proof of good health.
- Variable Life Policy: Features a fixed, level premium and investment options that can fluctuate in value.
- Group Term Life Conversion Privilege: Enables individuals to continue their insurance after leaving a group without providing evidence of insurability.
- Limited-Pay Life: Requires premium payments to be made for a specified number of years, providing whole-life coverage.
- Face Amount Plus Cash Value Policy: Pays the face amount plus the policy's cash value upon the insured's death.
- Universal Life Policy: Allows investment gains to contribute to the cash value, providing flexibility in premiums and death benefits.
Types of Life Insurance
- Modified Whole Life Policy: Has a fixed premium for the first five years that increases in the sixth year, while maintaining the same death benefit.
- Decreasing Term Policy: Offers coverage for a limited time with a death benefit that decreases according to a predetermined schedule.
- Variable Life Insurance: Provides level premiums and a selection of investment options controlled by the policyowner.
- Child Term Rider: An additional coverage option in a whole life policy to cover the policyowner's children.
- Family Income Policy: Provides an income to the family for a certain period after the policyholder's death, for example, 10 years if the policy was purchased with a 20-year rider.
Insurance Regulations and Contracts
- Variable Life Regulation: Requires producers to register with the National Association of Securities Dealers (NASD) before selling them due to the investment nature involved.
- Modified Endowment Contract (MEC): A policy that exceeds maximum premium limits and cannot be classified as a traditional life insurance contract.
- Term Insurance Characteristics: Expires at the end of the policy period, offering coverage for only a specific time.
Other Key Considerations
- Quick Cash Value Accumulation: A 20-pay life policy provides the quickest accumulation of cash value compared to other policies.
- Death Benefit under Joint Life and Survivor Policy: The face amount is paid upon the death of the last insured.
- Investment Growth in Variable Life Policies: Grows through investments in mutual funds, stocks, and bonds, allowing for potential appreciation.
Studying That Suits You
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Description
Test your knowledge of key insurance concepts with these flashcards from Chapter 3. This quiz covers important terms and provisions such as conversion provision, elements of Variable Life policies, and features of group Term Life policies. Perfect for students studying insurance fundamentals.
