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?
Signup and view all the answers
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Signup and view all the answers
How does a typical Variable Life Policy investment account grow?
Signup and view all the answers
S is covered by a whole life policy. Which insurance product can cover his children?
Signup and view all the answers
When is the face amount paid under a Joint Life and Survivor policy?
Signup and view all the answers
What type of life policy covers two people and pays upon the death of the last insured?
Signup and view all the answers
Which of these characteristics is consistent with a Straight Life policy?
Signup and view all the answers
Which is true concerning a Variable Universal Life policy?
Signup and view all the answers
Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?
Signup and view all the answers
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?
Signup and view all the answers
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Signup and view all the answers
Additional coverage can be added to a Whole Life policy by adding a(n):
Signup and view all the answers
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
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!
