Questions and Answers
What is Industrial Life Insurance designed for?
What is the premium payment frequency for Industrial Life Insurance?
Weekly
Which of the following types of insurance is NOT based on a weekly premium?
What is Group Life Insurance?
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Which type of life insurance does NOT accumulate cash value?
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What is a Renewable Term insurance?
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What does Cash Value refer to in a whole life policy?
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What is an Endowment Policy?
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What is the primary purpose of Juvenile Insurance?
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What feature is characterized by Universal Life insurance?
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What does Adjustable Life insurance provide?
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Variable Insurance includes regulated securities.
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Name the three terms of policies coverages.
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What characterizes a Level Term Policy?
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What is a Decreasing Term Policy used for?
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What does the Increasing Term Policy do?
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What are special features of term policies?
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Study Notes
Industrial Life Insurance
- Issues small face amounts, typically $1,000 or $2,000.
- Premiums are paid weekly and collected by debit agents.
- Designed primarily for burial coverage.
Ordinary Life Insurance
- Life insurance not issued on a weekly premium basis.
- Includes various types such as temporary (term) and permanent (whole).
Group Life Insurance
- Insurance coverage provided to members of a group like employers or unions.
- Coverage provided under one master contract, with group underwriting.
- No evidence of insurability usually required for members.
Term Life Insurance
- Offers maximum coverage for a limited period, known as pure life insurance.
- Benefits paid to beneficiaries if insured dies during the policy term.
- No cash value or living benefits.
Renewable Term
- Guarantees the right to continue coverage after the initial policy period.
- No proof of insurability needed for renewal.
Cash Value
- Represents the savings accumulation in a whole life policy.
Endowment Policy
- Pays the face amount at the end of a fixed period or at a specified age, or upon the insured's death before the end of the period.
Juvenile Insurance
- Insurance written on the lives of children within specified age limits.
Universal Life
- Features flexible premiums and adjustable death benefits.
- Investment gains typically contribute to cash value.
- Ideal for customers desiring control and options with their policy.
Adjustable Life
- Offers flexible premiums adjusting to changing financial needs.
- Combines whole life and term life into a single plan.
- No dividends involved; increasing face amounts may require proof of insurability.
Variable Insurance
- Requires FINRA and NASD registration for producers to sell.
- Includes interest-sensitive policies with fluctuating cash value and death benefits based on investment performance.
- Commonly linked to mutual funds, stocks, and bonds.
Types of Term Policies
- Three main types: Level Term, Increasing Term, and Decreasing Term.
Level Term Policy
- The most common type of temporary protection.
- Premiums and death benefits remain constant throughout the policy's life.
Decreasing Term Policy
- Features a level premium with death benefit decreasing annually.
- Often used to cover mortgage debts as protection decreases with loan balance.
Increasing Term Policy
- Has a level premium with death benefits increasing annually by a specified percentage.
Special Features of Term Policies
- Options include Renewable, Convertible, or combinations of both.
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Description
Test your knowledge on key insurance concepts from Chapter 3. This quiz covers different types of life insurance including industrial and ordinary life insurance. Prepare to understand their definitions and distinctions.
