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Questions and Answers
What is Credit Life Insurance?
What is Credit Life Insurance?
Term insurance expires at the end of the policy period.
Term insurance expires at the end of the policy period.
True
What does a variable insurance policy not guarantee?
What does a variable insurance policy not guarantee?
A return on investment accounts
What characteristic allows a Variable Universal Life policy owner to manage investments?
What characteristic allows a Variable Universal Life policy owner to manage investments?
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What type of life policy has a death benefit that adjusts periodically?
What type of life policy has a death benefit that adjusts periodically?
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What type of life policy is best for a 15-year mortgage?
What type of life policy is best for a 15-year mortgage?
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What is an element of a Variable Life policy?
What is an element of a Variable Life policy?
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What does a Modified Endowment Contract (MEC) exceed?
What does a Modified Endowment Contract (MEC) exceed?
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What is life insurance that covers an insured's whole life with level premiums called?
What is life insurance that covers an insured's whole life with level premiums called?
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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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What type of policy provides coverage for 20 years after death and a lump sum?
What type of policy provides coverage for 20 years after death and a lump sum?
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What kind of policy has a fluctuating death benefit according to its investment performance?
What kind of policy has a fluctuating death benefit according to its investment performance?
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What kind of premium does a Whole Life policy have?
What kind of premium does a Whole Life policy have?
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Adjustable Life policies can have premiums that are raised or lowered based on performance.
Adjustable Life policies can have premiums that are raised or lowered based on performance.
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Which action requires proof of insurability in an Adjustable Life policy?
Which action requires proof of insurability in an Adjustable Life policy?
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What policy is needed for time-limited coverage with a changing death benefit?
What policy is needed for time-limited coverage with a changing death benefit?
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What is the coverage limit on a group credit life policy?
What is the coverage limit on a group credit life policy?
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What statement about a Whole Life policy is correct?
What statement about a Whole Life policy is correct?
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What type of insurance provides permanent life coverage with premiums payable for life?
What type of insurance provides permanent life coverage with premiums payable for life?
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What does a Face Amount Plus Cash Value Policy pay at the insured's death?
What does a Face Amount Plus Cash Value Policy pay at the insured's death?
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Which type of policy is considered overfunded according to IRS guidelines?
Which type of policy is considered overfunded according to IRS guidelines?
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What insurance product can cover children under a whole life policy?
What insurance product can cover children under a whole life policy?
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What kind of life insurance product covers children under their parent's policy?
What kind of life insurance product covers children under their parent's policy?
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What feature allows an individual to continue insurance after leaving a group Term Life policy?
What feature allows an individual to continue insurance after leaving a group Term Life policy?
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What type of life insurance has flexible premiums and an adjustable death benefit?
What type of life insurance has flexible premiums and an adjustable death benefit?
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Which policy requires NASD registration before selling?
Which policy requires NASD registration before selling?
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What kind of life insurance starts as temporary but can be modified to permanent?
What kind of life insurance starts as temporary but can be modified to permanent?
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What applies when a term policy is exchanged for a whole life policy without health proof?
What applies when a term policy is exchanged for a whole life policy without health proof?
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What is the most important factor when converting term insurance?
What is the most important factor when converting term insurance?
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What type of policy does someone need for limited time coverage with lowest premium?
What type of policy does someone need for limited time coverage with lowest premium?
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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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If G purchased a Family Income policy at age 40, how long would his family receive income if he dies at age 50?
If G purchased a Family Income policy at age 40, how long would his family receive income if he dies at age 50?
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What does a Limited-Pay Life policy have?
What does a Limited-Pay Life policy have?
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What type of policy offers the fastest accumulation of cash value?
What type of policy offers the fastest accumulation of cash value?
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All insurance products require an agent to have FINRA registration.
All insurance products require an agent to have FINRA registration.
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What kind of life insurance pays specified income for 30 years and then a lump sum?
What kind of life insurance pays specified income for 30 years and then a lump sum?
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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 characteristic is consistent with a Straight Life policy?
What characteristic is consistent with a Straight Life policy?
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Which would be considered a Limited-Pay Life policy?
Which would be considered a Limited-Pay Life policy?
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Where do the investment gains from a Universal Life Policy typically go?
Where do the investment gains from a Universal Life Policy typically go?
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What kind of life policy pays the face value upon the death of the insured or at age 100?
What kind of life policy pays the face value upon the death of the insured or at age 100?
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Modified Whole Life is considered interest-sensitive.
Modified Whole Life is considered interest-sensitive.
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What type of life insurance are credit policies issued as?
What type of life insurance are credit policies issued as?
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What provision allows policyowners to have premiums waived if the insured dies shortly after purchase?
What provision allows policyowners to have premiums waived if the insured dies shortly after purchase?
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Which provision allows changing a term life policy to permanent without proof of health?
Which provision allows changing a term life policy to permanent without proof of health?
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What type of life insurance gives maximum coverage for a limited period?
What type of life insurance gives maximum coverage for a limited period?
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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 kind of policy should T purchase if he wants $10,000 available in 10 years?
What kind of policy should T purchase if he wants $10,000 available in 10 years?
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What kind of term policy allows continuation after the initial period expires?
What kind of term policy allows continuation after the initial period expires?
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All characteristics of Adjustable Life policies include face amounts adjusted using policy dividends.
All characteristics of Adjustable Life policies include face amounts adjusted using policy dividends.
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What kind of insurance policy provides an income stream after the insured dies?
What kind of insurance policy provides an income stream after the insured dies?
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What type of policy has fixed premium for the first 5 years then increases?
What type of policy has fixed premium for the first 5 years then increases?
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What is true about the premium payment schedule for whole life policies?
What is true about the premium payment schedule for whole life policies?
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Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
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What kind of special need might a policy owner have with an Adjustable Life insurance policy?
What kind of special need might a policy owner have with an Adjustable Life insurance policy?
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What type of policy should Q purchase for $100,000 of permanent protection and $50,000 of Term coverage?
What type of policy should Q purchase for $100,000 of permanent protection and $50,000 of Term coverage?
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What should N purchase for level premiums, permanent protection, and to be paid-up at retirement?
What should N purchase for level premiums, permanent protection, and to be paid-up at retirement?
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What type of life insurance provides cash value along with a level face amount?
What type of life insurance provides cash value along with a level face amount?
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How long does coverage normally last on a limited-pay life policy?
How long does coverage normally last on a limited-pay life policy?
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Study Notes
Credit Life Insurance
- Provides coverage not exceeding the loan amount.
Term Insurance
- Expires at the end of the specified policy period.
Variable Insurance Policy
- Does not guarantee returns on investment accounts.
Variable Universal Life Policy
- Policyowner has control over investment allocations and premium payments.
Decreasing Term Insurance
- Offers a death benefit that decreases periodically for a specified time.
15-Year Mortgage Protection
- Best secured by a 15-year decreasing term life policy.
Variable Life Policy
- Features a fixed, level premium.
Modified Endowment Contract (MEC)
- Exceeds premium limits set for life insurance recognition.
Limited-Pay Life Insurance
- Whole life coverage with level premiums paid for a limited period.
Joint Life Policy
- Insures two lives and pays upon the first death.
Family Maintenance Policy
- Provides monthly income for 20 years post-death, with a lump sum at the end of the term.
Variable Life Insurance
- Offers a fluctuating death benefit based on underlying investment performance.
Whole Life Policy Premiums
- Typically consist of level premiums.
Equity Indexed Life Insurance
- Premiums may not fluctuate according to investment performance.
Adjustable Life Policy
- Proof of insurability is required when increasing the face amount.
Coverage Needs
- A decreasing term policy meets the need for temporary coverage with changing death benefits.
Group Credit Life Policy Coverage
- Limited to the insured's total loan value.
Whole Life Policy Benefits
- Cash value accumulation can be borrowed against.
Permanent Life Coverage
- Provided by whole life policies with premiums payable for life.
Face Amount Plus Cash Value Policy
- Pays both face amount and cash value upon the insured's death.
Modified Endowment Contracts
- Considered overfunded as per IRS guidelines.
Child Term Riders
- Cover children under a parent’s existing policy.
Term Riders
- Specific to covering a parent's children under their policy.
Conversion Privilege
- Allows individuals to maintain insurance after leaving a group without proving insurability.
Universal Life Insurance
- Features flexible premiums and adjustable death benefits.
Registration for Variable Life Policy Agents
- Agents must register with the National Association of Securities Dealers (NASD).
Convertible Term Insurance
- Initially temporary but convertible to permanent insurance without health proof.
Term Insurance Conversion
- Involves using a conversion provision for switching policies.
Cost of Converting Term Insurance
- The most critical factor in conversion decision-making.
Level Term Coverage
- Provides limited term insurance at the lowest premium.
Variable Life Policy Growth
- Investment accounts typically grow through mutual funds, stocks, and bonds.
Family Income Policy
- If purchased at 40 with a 20-year rider, income continues for 10 years if the insured dies at 50.
Limited-Pay Life Policy
- Payments limit to a specific number of years.
Quick Cash Value Accumulation
- 20-Pay Life policy offers fastest cash value growth.
FINRA Registration Exception
- Modified Whole Life does not require agent registration.
Family Maintenance Policy Functionality
- Provides income following the insured's death for a specified duration.
Survivorship Policy
- Covers two people, paying upon the death of the last insured.
Straight Life Policy Characteristics
- Premiums are paid for as long as coverage is active.
Limited-Pay Life Example
- Life Paid-Up at Age 70 qualifies as a limited-pay product.
Universal Life Policy Investment Gains
- Generally contribute to the cash value of the policy.
Whole Life Payment Upon Death
- Either pays the face value at the insured's death or at age 100.
Interest-Sensitive Life Products
- Modified Whole Life is not classified as interest-sensitive.
Credit Life Insurance Policies
- Issued as term insurance products.
Payor Provision
- Waives premiums if the father dies within three years of policy issuance on his child.
Conversion Provision for Term Policies
- Permits term insurance conversion to a permanent policy without health proof.
Greatest Coverage for Limited Period
- Provided by term life insurance products.
Joint Life and Survivor Policy Payment Timing
- Face amount is paid upon the death of the last insured.
Ten-Year Endowment Insurance Needs
- A policy under this type guarantees $10,000 in 10 years.
Renewable Term Coverage
- Allows continuation of term insurance after the initial policy period.
Adjustable Life Policy Misconception
- Face amounts cannot be adjusted through policy dividends.
Family Maintenance Policy Specifics
- Supplies an income to beneficiaries for a predetermined time after the insured's death.
Modified Whole Life Policy Premium Structure
- Fixed premium for the first five years, increases thereafter.
Whole Life Policy Premium Payments
- Premiums continue throughout the insured's lifetime, valid until death.
Beneficiaries of IOLI
- The policyowner benefits upon the insured's death.
Flexible Premiums in Adjustable Life Insurance
- Offers options for premium structuring according to the policyowner's needs.
Whole Life Policy with Other Insured Rider
- Allows coverage for the policyowner's spouse and children under a single policy.
30 Pay Life Insurance Option
- Suitable for retirement planning with levels of premiums and permanent coverage.
Whole Life Characteristics
- Combines cash value accumulation with a stable face amount.
Limited-Pay Life Policy Coverage Duration
- Typically remains effective until the age of 100.
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Description
Test your knowledge on essential insurance concepts with these flashcards. This quiz covers key definitions and characteristics of various insurance policies, including credit life insurance and term insurance. Perfect for exam preparation or reinforcing your understanding of insurance fundamentals.
