Questions and Answers
What happens if a Return of Premium Term policy is not held to the end of term?
There will be a nominal return of premiums paid, the amount will depend upon how long the policy was in-force.
The face amount of an Ordinary Whole Life Policy _________ over the life of the policy.
Remains the same.
If Joe exercises all of the options at the ages specified under the typical rider, how many policies will he end up with?
7
Which of the following would be the most economical and effective way for a married couple to ensure their heirs have funds to pay estate taxes?
Signup and view all the answers
Which of the following policies requires a producer to have both a life and securities license to sell?
Signup and view all the answers
What type of term life insurance policy has a policy premium that can fluctuate between the current charge and a maximum rate?
Signup and view all the answers
Which of the following best describes the return of premium rider?
Signup and view all the answers
The Double Indemnity Rider requires that the insured die within _____ days of the accident.
Signup and view all the answers
Which of the following is a type of life insurance that provides diminishing coverage?
Signup and view all the answers
If Alvin purchases a Variable Universal Life Policy with a face amount of $250,000 and chooses death benefit Option B, upon his death the amount payable would be _________ if the policy had $25,000 in cash values.
Signup and view all the answers
Which of the following term life insurance policies would be the most expensive at the time of issuance?
Signup and view all the answers
What amount will the beneficiary receive if the insured of a 20-Pay Life Policy with a face amount of $25,000 dies after 15 years?
Signup and view all the answers
What is the maximum amount Jason can borrow from his Whole Life insurance policy?
Signup and view all the answers
What policy should the producer show an applicant who wants a term life insurance policy lasting 20 years with a manageable cap?
Signup and view all the answers
The net amount at risk in an Ordinary Whole Life Insurance Policy _________ over the life of the policy.
Signup and view all the answers
What would the beneficiary receive if the insured of a Life Paid-Up at 75 Policy dies at age 68?
Signup and view all the answers
What type of term insurance is used by the Return of Premium Rider, the Return of Cash Value Rider, and the Cost of Living Rider?
Signup and view all the answers
What transaction occurs if XYZ Inc. purchases Quentin's life insurance policy for less than the face amount but more than the cash value?
Signup and view all the answers
A Living Needs Accelerated Benefit Rider allows early payment of a portion of the face amount if the insured becomes terminally ill with less than how many months to live?
Signup and view all the answers
When the life insurance policy's cash value equals the face amount of the policy, and proceeds are paid to the policyowner, this is known as the policy's _________.
Signup and view all the answers
What can vary depending on the method of premium?
Signup and view all the answers
What is required to keep the Guaranteed No-lapse Rider in effect?
Signup and view all the answers
All of the following life insurance policies increase cash value based on credited interest, except:
Signup and view all the answers
All of the following are characteristics of Ordinary Whole Life Insurance, except:
Signup and view all the answers
Which of the following is NOT a type of Term Life Insurance Policy?
Signup and view all the answers
A Return of Premium Term policy provides for a full refund of premiums under what circumstances?
Signup and view all the answers
How will the long-term care benefits affect the ultimate death benefit payable to the beneficiary if the insured qualifies?
Signup and view all the answers
What is credit life insurance commonly referred to when used to protect against the unpaid mortgage balance?
Signup and view all the answers
A Guaranteed Universal Life policy is also referred to as a(n):
Signup and view all the answers
The value within a permanent life insurance policy that the policyowner can access is known as the ___________.
Signup and view all the answers
Typical exclusions or restrictions in an accelerated death benefit include all of the following, except:
Signup and view all the answers
What premium paying method allows fluctuation between increased, decreased, or skipped payments?
Signup and view all the answers
Study Notes
Return of Premium Term Policy
- If not held until the end of the term, a nominal refund is issued based on the duration the policy was active.
Ordinary Whole Life Policy
- Face amount remains constant throughout the insurance duration.
Guaranteed Insurability Rider
- Joe could potentially end up with 7 policies by exercising his options at specified ages.
Estate Tax Funding
- A Joint Survivorship Life Policy is deemed the most economical for couples preparing for estate taxes.
Licensing for Variable Universal Policies
- Requires agents to hold both a life and securities license to sell effectively.
Indeterminate Term Life Insurance
- Premiums can vary based on insurer's mortality rates, expenses, and investment returns.
Return of Premium Rider
- Offers an increasing term benefit that equals the total premiums paid cumulatively.
Double Indemnity Rider
- Coverage kicks in if the insured dies within 90 days post-accident.
Decreasing Term Life Insurance
- Coverage amount diminishes over time, often linked to loan or mortgage repayments.
Variable Universal Life Policy
- A death benefit Option B means the benefit payable upon death would be $275,000 if cash value is $25,000.
Expensive Term Life Insurance Policy
- A renewable and convertible term policy tends to be the priciest option available.
Beneficiary Payout from 20-Pay Life Policy
- Beneficiary will receive the face amount of $25,000 regardless of cash value at the insured's death.
Policy Loan Maximum
- Jason can borrow up to $10,000 against his whole life policy's cash value.
Indeterminate Premium Term Life Insurance
- Ideal for insured willing to risk premium fluctuation, apt for a 20-year commitment.
Net Amount at Risk
- Decreases over the life of an Ordinary Whole Life Insurance Policy.
Payout from Life Paid-Up at 75 Policy
- Beneficiary receives the full face amount if the insured dies prior to age 75.
Riders Using Increasing Term Insurance
- Return of Premium Rider, Return of Cash Value Rider, and Cost of Living Rider utilize increasing term insurance strategies.
Life Settlement
- A transaction where a life insurance policy is sold to another entity for cash, usually below face amount but above cash value.
Living Needs Accelerated Benefit Rider
- Allows early partial face amount payout if the insured is diagnosed with terminal illness and has less than 24 months to live.
Policy's Endowment
- Occurs when the cash value and face amount are equal, resulting in payment to the policyowner.
Premium Variation
- Premium methods can differ based on the type of life insurance policy issued.
Guaranteed No-lapse Rider
- Requires full and timely premium payment to maintain policy status without lapse.
Cash Value Characteristics
- All permanent life insurance policies, except Variable Universal Life, accrue cash value through credited interest.
Ordinary Whole Life Insurance Characteristics
- Misconception: Premiums paid until age 100 are returned to policyowners if they live that long.
Term Life Insurance Exclusion
- Variable is not classified as a type of Term Life Insurance Policy.
Full Premium Refund Conditions
- Complete refunds are given under Return of Premium Term policies if the insured survives the term.
Long-Term Care Impact on Death Benefit
- Receipt of long-term care benefits due to chronic illness results in a reduced death benefit.
Mortgage Redemption Insurance
- Commonly termed when credit life insurance secures the unpaid mortgage balance.
Guaranteed Universal Life Policy
- Also known as Universal Life with a No-Lapse Guarantee, providing stability in premiums.
Cash Value in Permanent Policies
- Represents the asset within a policy accessible via loans or surrender.
Accelerated Death Benefit Exclusions
- Excludes limitations on accidental injuries occurring while at work.
Flexible Premium Payment Method
- Allows policyowners to adjust payment amounts, including increases, decreases, or skips as desired.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge of various insurance policies and riders with these flashcards. This quiz covers important concepts such as Return of Premium Term policies and Ordinary Whole Life policies. Perfect for anyone looking to deepen their understanding of insurance basics.
