Podcast
Questions and Answers
How much will the insurance company pay the beneficiary if 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 if K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident?
$20,000 death benefit
Which type of life insurance policy should N purchase if he is looking for level premiums, permanent protection, and be paid-up at retirement?
Which type of life insurance policy should N purchase if he is looking for level premiums, permanent protection, and be paid-up at retirement?
Which type of whole life insurance policy will provide the most rapid growth of cash value for J, who is 35 years old?
Which type of whole life insurance policy will provide the most rapid growth of cash value for J, who is 35 years old?
How does a typical Variable Life Policy investment account grow?
How does a typical Variable Life Policy investment account grow?
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Which insurance product can cover S's children if he is covered by a whole life policy?
Which insurance product can cover S's children if he is covered by a whole life policy?
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Which type of life insurance allows the policyowner to have level premiums and also choose from a selection of investment options?
Which type of life insurance allows the policyowner to have level premiums and also choose from a selection of investment options?
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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 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 type of Term insurance may be renewable if K is looking to purchase Renewable Term insurance?
Which type of Term insurance may be renewable if K is looking to purchase Renewable Term insurance?
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Which feature of a group Term Life policy allows an individual to leave and continue their insurance without providing evidence of insurability?
Which feature of a group Term Life policy allows an individual to leave and continue their insurance without providing evidence of insurability?
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Which characteristic is consistent with a Straight Life policy?
Which characteristic is consistent with a Straight Life policy?
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What is true concerning a Variable Universal Life policy?
What is true concerning a Variable Universal Life policy?
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What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
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What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?
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In what circumstance will a death benefit NOT be paid according to the Family Policy that L and L's spouse purchased?
In what circumstance will a death benefit NOT be paid according to the Family Policy that L and L's spouse purchased?
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When does a term life insurance policy mature?
When does a term life insurance policy mature?
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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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What is the most important factor when determining whether to convert term insurance at the insured's attained age or original age?
What is the most important factor when determining whether to convert term insurance at the insured's attained age or original age?
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Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
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A Family Income Policy is a combination of Whole Life and?
A Family Income Policy is a combination of Whole Life and?
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Whose life is covered on a life insurance policy that contains a payor benefit clause?
Whose life is covered on a life insurance policy that contains a payor benefit clause?
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What statements about accumulated interest earned on dividends from an insurance policy is TRUE?
What statements about accumulated interest earned on dividends from an insurance policy is TRUE?
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Which statement regarding the Misstatement of Age provision is considered to be true?
Which statement regarding the Misstatement of Age provision is considered to be true?
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Study Notes
Life Insurance Overview
- K's 20-Year Endowment policy pays a $20,000 death benefit if the insured dies within the term.
- N, a 40-year-old, should purchase a 30 Pay Life policy for level premiums, permanent protection, and to be paid-up at retirement age.
- J’s best option for rapid cash value growth is a 20-Pay Life policy, as shorter pay periods accelerate cash value accumulation.
Variable Life Policies
- Variable Life Policy investment accounts grow through mutual funds, stocks, and bonds.
- Variable Life insurance allows the policyholder to maintain level premiums while selecting investment options.
Riders and Coverage
- A Child Term Rider is available for S, covering his children under a whole life policy.
- Investor-Originated Life Insurance (IOLI) benefits the policyowner upon the insured's death.
Policy Features
- 20-Pay Life provides the quickest cash value accumulation for a 40-year-old due to its short premium payment period.
- Renewable Term insurance includes level term insurance policies, which can be renewed as needed.
- Conversion privilege in a group Term Life policy allows individuals to continue insurance without proof of insurability when leaving the group.
Types of Life Insurance Policies
- Straight Life policy requires premiums to be paid for the duration of coverage.
- Variable Universal Life policies let the policyowner decide on investment allocation and premium payment amounts.
- Decreasing Term insurance has a death benefit that adjusts over time for a specified period.
- Family Maintenance Policy offers monthly income to a beneficiary for 30 years plus a lump sum at the end of that duration.
- A Family Policy provides coverage until the spouse turns 65, but no benefits are paid if the spouse dies after that age.
Policy Maturity and Characteristics
- Term life insurance matures upon the insured's death during the policy term.
- Limited Pay Life provides coverage for the insured's entire life with premiums paid over a limited period.
- Cost is a crucial factor in deciding between conversion options based on attained age or original age.
Conversion and Income Policies
- The Conversion provision allows changing a term policy to a permanent one without health proof.
- Family Income Policy combines Whole Life and Decreasing Term insurance, providing both secure income and death coverage.
- A Payor Benefit Clause ensures continuance of insurance for a juvenile if the premium payer dies or becomes disabled.
Financial Considerations
- Accumulated interest from dividends on insurance policies is taxed as ordinary income.
- The Misstatement of Age provision adjusts coverage according to the insured's true age if any discrepancies are discovered.
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Description
Explore the essential features of life insurance, including endowment policies and variable life options. This quiz covers policy types designed for different needs such as cash value growth and riders for additional coverage. Test your knowledge on the benefits and specifics of life insurance policies.
