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Questions and Answers
What can be used as collateral for a policy assignment?
What can be used as collateral for a policy assignment?
What happens to outstanding policy loans in relation to the death benefit?
What happens to outstanding policy loans in relation to the death benefit?
Which factor is essential for calculating the death benefit of a life insurance policy?
Which factor is essential for calculating the death benefit of a life insurance policy?
In a term life insurance policy, which of the following is true about the death benefit?
In a term life insurance policy, which of the following is true about the death benefit?
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How do universal life (UL) policies differ in terms of death benefits from whole life policies?
How do universal life (UL) policies differ in terms of death benefits from whole life policies?
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What does the median life expectancy indicate for males aged 65 in Canada?
What does the median life expectancy indicate for males aged 65 in Canada?
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How does the probability of death change as individuals age, according to the information provided?
How does the probability of death change as individuals age, according to the information provided?
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What is the likelihood of a male who just turned 65 dying before reaching his 66th birthday?
What is the likelihood of a male who just turned 65 dying before reaching his 66th birthday?
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What concept is used by insurance companies to determine premiums for life insurance policies?
What concept is used by insurance companies to determine premiums for life insurance policies?
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What trend is observed regarding the probability of death in the early years of life?
What trend is observed regarding the probability of death in the early years of life?
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What is the purpose of a 'life table' as mentioned in the content?
What is the purpose of a 'life table' as mentioned in the content?
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At what age does the increase in the probability of death start to accelerate significantly?
At what age does the increase in the probability of death start to accelerate significantly?
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What statistical measure indicates that 50% of a males aged 65 will not live past?
What statistical measure indicates that 50% of a males aged 65 will not live past?
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What is meant by using a life insurance policy as collateral?
What is meant by using a life insurance policy as collateral?
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Which statement is true regarding outstanding policy loans?
Which statement is true regarding outstanding policy loans?
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How is the level death benefit option calculated?
How is the level death benefit option calculated?
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Which of the following is not a typical factor in calculating death benefits?
Which of the following is not a typical factor in calculating death benefits?
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In the context of policy loans, what happens if the loan amount exceeds the cash value?
In the context of policy loans, what happens if the loan amount exceeds the cash value?
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What does a policyholder need to consider before using a life insurance policy as collateral?
What does a policyholder need to consider before using a life insurance policy as collateral?
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What is the primary disadvantage of loans against a life insurance policy?
What is the primary disadvantage of loans against a life insurance policy?
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Which option describes a policy rider that will add benefits upon death?
Which option describes a policy rider that will add benefits upon death?
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How do indexed death benefits work?
How do indexed death benefits work?
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What is a key feature of the guaranteed insurability benefit (GIB) rider?
What is a key feature of the guaranteed insurability benefit (GIB) rider?
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Why is tax deferral considered beneficial in life insurance policies?
Why is tax deferral considered beneficial in life insurance policies?
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What can happen to a policy if a policyholder fails to repay outstanding loans?
What can happen to a policy if a policyholder fails to repay outstanding loans?
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What is the impact of investment returns on a life insurance policy?
What is the impact of investment returns on a life insurance policy?
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Study Notes
Life Insurance Concepts
- Universal Life (UL) insurance involves adjustable mortality deductions, allowing for policy flexibility.
- Death benefit options include level death benefits, level death benefits plus account value, level death benefits plus cumulative premiums, and indexed death benefits.
- Investment components include net premiums, tax deferral, and various investment choices like daily interest accounts, guaranteed investment accounts, index funds, and mutual funds.
- Investment returns impact policy viability, as demonstrated by policy illustrations.
- Accumulating funds in UL policies involve surrendering the policy, partial withdrawals, premium offsets, policy loans, collateral for third-party loans, leveraging, and death benefit distributions.
- UL insurance offers advantages and disadvantages compared to other types of life insurance, such as whole life.
- UL can be utilized strategically, especially when coupled with maxed-out RRSPs and TFSAs, aiming for tax-free retirement income.
Riders and Supplementary Benefits
- Riders enhance death benefits and include paid-up additions, term insurance riders (applicable to term and permanent policies, with options like family and child coverage), accidental death riders, and guaranteed insurability benefits.
- Supplementary benefits augment death benefits, including accelerated death benefits, often triggered by terminal illness or dread diseases.
Mortality Statistics
- Life expectancy and probability of death vary by age and gender, impacting insurance calculations.
- A life table, compiled from past mortality data, aids in calculating insurance premiums based on these probabilities.
- Probability of death is statistically calculated based on a person's age and group demographics, assuming future mortality trends mirror past experience.
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Description
Test your knowledge on Universal Life (UL) insurance concepts. This quiz covers adjustable mortality deductions, death benefit options, and investment components associated with UL policies. Understand how investment returns impact policy viability and the strategic advantages of UL insurance.
