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Questions and Answers
What is true about a variable insurance policy?
Which statement about a whole life policy is correct?
Which statement is correct regarding the premium payment schedule for whole life policies?
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as?
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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?
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How does a typical Variable Life Policy investment account grow?
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S is covered by a whole life policy. Which insurance product can cover his children?
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When is the face amount paid under a Joint Life and Survivor policy?
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What type of life policy covers two people and pays upon the death of the last insured?
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Which of these characteristics is consistent with a Straight Life policy?
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Which is true concerning a Variable Universal Life policy?
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Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
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A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct?
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Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
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Additional coverage can be added to a Whole Life policy by adding a(n):
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Study Notes
Life Insurance Policies Overview
- Variable Insurance Policy: Guarantees a minimum return but does not ensure returns on investment accounts or allow policyholders to take on investment risk.
- Whole Life Policy: Cash value can be borrowed against; premiums are paid throughout the insured's lifetime until death.
- Premium Payment Schedules: Whole life policies have premiums payable for the insured's entire life, ensuring coverage lasts until death.
Types of Life Insurance Policies
- Variable Life Insurance: Offers fluctuating death benefits based on the performance of an underlying investment portfolio.
- Decreasing Term Policy: Death benefit adjusts periodically and is issued for a specified time frame.
- Survivorship Policy: Covers two individuals, paying out upon the death of the last insured.
Investment Accounts and Growth
- Growth of Variable Life Policy: Investment accounts typically grow through mutual funds, stocks, and bonds, offering potential for higher returns.
Riders and Additional Coverage
- Child Term Rider: Coverage option specifically for policyholder's children.
- Decreasing Term Rider: Accessible by adding to a Whole Life policy for additional temporary coverage.
Unique Features of Policies
- Joint Life and Survivor Policy: Face amount is paid upon the last insured's death.
- Straight Life Policy: Premiums are maintained for the duration of coverage; no adjustments to premium or death benefits permitted.
- Variable Universal Life Policy: Allows policyholders control over investment directions and premium amounts.
Cash Value Accumulation
- 20-Pay Life Policy: Suitable for those who want faster cash value accumulation compared to Straight Life.
- Impact of Insurer's Financial Rating: Determines cash value accumulation rates in both Straight Life and 20-Pay Life policies.
Premium and Investment Choices
- Variable Life Policy Features: Characterized by level premiums combined with a range of investment options and higher growth potential.
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Description
Test your knowledge on life insurance policies through these flashcards focused on provisions, options, and riders. Each card offers a term and a definition to enhance your understanding of variable and whole life policies. Perfect for exam preparation!