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Life Insurance Policies Flashcards
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Life Insurance Policies Flashcards

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@PatientYttrium

Questions and Answers

What whole life product has lower premiums for the first 3 to 5 years of the contract, with a one-time premium increase?

  • Variable Universal Life
  • Indexed Life Insurance policy
  • Modified premium whole life (correct)
  • Graded premium whole life

    • A jumping juvenile policy has a death benefit that increases to ______ times its stated value with no premium increase.

    5

    Generally, credit insurance uses ______ term.

    decreasing

    Name the ability to change from a term policy to a whole life policy without providing evidence of insurability.

    <p>Convertibility</p> Signup and view all the answers

    What whole life product has lower premiums that increase each year for the first 3 to 5 years of the policy?

    <p>Graded premium whole life</p> Signup and view all the answers

    What policy combines variable life with flexible premiums?

    <p>Variable Universal Life</p> Signup and view all the answers

    Which life policy has cash value gains that mirror or are tied to a stock market index, such as the S&P 500?

    <p>Indexed Life Insurance policy</p> Signup and view all the answers

    What life insurance policy pays a benefit at the earlier of death or the end of a specified period?

    <p>An endowment</p> Signup and view all the answers

    A universal life policy allows for partial withdrawals of the cash value.

    <p>True</p> Signup and view all the answers

    What type of insurance policy is most often used as a mortgage redemption policy?

    <p>Decreasing term insurance</p> Signup and view all the answers

    What is another name for interest-sensitive whole life insurance?

    <p>Current assumption whole life</p> Signup and view all the answers

    Regardless of cash value performance, VL policies have a guaranteed minimum death benefit.

    <p>True</p> Signup and view all the answers

    What is single-pay whole life?

    <p>A whole life policy with a one-time premium and coverage provided until age 100 or death</p> Signup and view all the answers

    What nontraditional life insurance policy has a flexible death benefit and a rate of return that is interest-sensitive?

    <p>A universal life policy</p> Signup and view all the answers

    The cash value of a single premium whole life policy will equal the death benefit at age ______.

    <p>100</p> Signup and view all the answers

    A 10-year level term policy provides coverage for ______ years.

    <p>10</p> Signup and view all the answers

    A 5-year level term policy will renew every 5 years subject to _______.

    <p>maximum age limitation</p> Signup and view all the answers

    What are the two UL death benefit options?

    <p>Options A and B</p> Signup and view all the answers

    For how long will the premium on a 20-year level term policy remain level?

    <p>For 20 years</p> Signup and view all the answers

    Straight life has a ______ and ______ premium.

    <p>predetermined, level</p> Signup and view all the answers

    What two licenses are required to sell variable products?

    <p>A life insurance and FINRA license</p> Signup and view all the answers

    What is cash value?

    <p>The equity that grows inside a permanent policy</p> Signup and view all the answers

    What is attained or actual age conversion?

    <p>Conversion where new policy premiums are based on a person's current age</p> Signup and view all the answers

    Cash value increases with every ______ payment after the ______ year.

    <p>premium, third</p> Signup and view all the answers

    Describe an Equity Index Life policy.

    <p>Usually a UL policy with cash value tied to an equity index account; offers a guaranteed minimum rate of return</p> Signup and view all the answers

    The death benefit and premium in a whole life contract are ______ throughout the owner's lifetime.

    <p>level</p> Signup and view all the answers

    Describe an Adjustable Life policy.

    <p>A policy that offers the ability to change the death benefit based on a person's needs</p> Signup and view all the answers

    Cash value generally begins to build within a whole life policy sometime in the ______ year.

    <p>third</p> Signup and view all the answers

    ______ Life Insurance is purchased to protect a borrower if a lender dies and cannot repay a loan.

    <p>Credit</p> Signup and view all the answers

    The cash value of a whole life policy grows at a minimum interest rate of ______% to ______%.

    <p>3, 4</p> Signup and view all the answers

    A WL death benefit and premium both remain _______ for the life of the policy.

    <p>level</p> Signup and view all the answers

    The death benefit of a term policy is payable only if death occurs during the ______ period.

    <p>term coverage</p> Signup and view all the answers

    Describe an endowment.

    <p>Endowments have heavy cash savings, intended for future uses such as retirement or college funding.</p> Signup and view all the answers

    What is another name for a Second or Last to Die policy?

    <p>Survivorship Life</p> Signup and view all the answers

    Term insurance builds cash value.

    <p>False</p> Signup and view all the answers

    What is the renewability feature?

    <p>The ability to renew a term policy without having to provide evidence of insurability.</p> Signup and view all the answers

    As a client ages, what happens to her premium payments in a variable life policy?

    <p>Payments in a variable life policy remain fixed (level).</p> Signup and view all the answers

    Whole life premiums remain ______ for the life of the policy.

    <p>level</p> Signup and view all the answers

    A 20-year endowment will mature at the end of ______ years.

    <p>20</p> Signup and view all the answers

    What policy combines whole life insurance and a decreasing term rider providing coverage on the breadwinner?

    <p>A Family Income Policy</p> Signup and view all the answers

    A jumping juvenile policy may also be called ______.

    <p>juvenile life insurance</p> Signup and view all the answers

    Which whole life payment option would have the highest annual premium - 10, 20, or 30 pay?

    <p>10 Pay</p> Signup and view all the answers

    At what age is a whole life policy's cash value assumed to equal its death benefit?

    <p>100</p> Signup and view all the answers

    What are loan option and cash surrender?

    <p>Methods available to the policy owner to obtain or access the policy's cash value</p> Signup and view all the answers

    What type of policy protects the bank in the event a borrower dies?

    <p>Credit life</p> Signup and view all the answers

    A VL policy has a ______ premium and a cash value that is ______.

    <p>level</p> Signup and view all the answers

    What age is used to determine level term policy renewals?

    <p>Premiums are based on a person's actual age, and renewal premiums will increase.</p> Signup and view all the answers

    ______ pay a living benefit at end of a set timeframe or a death benefit should death occur during that timeframe.

    <p>Endowments</p> Signup and view all the answers

    Study Notes

    Life Insurance Policies Overview

    • Modified Premium Whole Life: Lower premiums for initial 3 to 5 years, followed by a one-time premium increase.
    • Jumping Juvenile Policy: Offers a death benefit that increases to 5 times the stated value without additional premium.
    • Credit Insurance: Typically uses decreasing term insurance to match declining debt obligations.
    • Convertibility: Allows policyholders to convert a term policy into a whole life policy without proving insurability.
    • Graded Premium Whole Life: Features lower starting premiums that increase annually over the first 3 to 5 years.

    Types of Life Insurance Policies

    • Variable Universal Life: Combines features of variable life insurance with flexible premium payments.
    • Indexed Life Insurance: Cash value tied to a stock market index, like the S&P 500, providing growth tied to market performance.
    • Endowment Policy: Pays out either on death or at the end of a specified term, designed for accumulation of savings.
    • Credit Life Insurance: Protects borrowers by ensuring loan repayment in the event of the lender's death.
    • Survivorship Life: Also known as Second or Last to Die policy, it insures two lives and pays out after both have passed away.

    Policy Features and Terms

    • Cash Value: Accumulates within permanent life insurance policies, representing the policy's equity.
    • Premium Payments: In whole life policies, premiums remain level throughout the life of the policy.
    • Death Benefit: In term life insurance, benefits are payable only if death occurs within the term coverage period.
    • Renewability: Allows renewal of term life policies without providing proof of insurability, usually comes with age limitations.
    • Loan Options: Policy owners can access cash value through loans or surrender options.

    Special Policy Characteristics

    • Equity Index Life Policy: Typically a universal life policy with cash value linked to an equity index, offering guaranteed returns.
    • Single Premium Whole Life: Involves a one-time premium for lifetime coverage, with cash value equaling death benefit at age 100.
    • Adjustable Life Policy: Offers flexibility in adjusting death benefits based on changing personal needs.
    • Family Income Policy: Combines whole life insurance with a decreasing term rider, providing coverage for the breadwinner.

    Important Age and Timeframes

    • Whole Life Cash Value: Begins to build around the third year of the policy.
    • 20-Year Endowment Maturity: This policy matures at the conclusion of 20 years.
    • Level Term Policy: Coverage duration is strictly defined, such as a 10 or 5-year level term policy.

    True/False Aspects in Policies

    • Universal Life Policy: Allows partial withdrawals from cash value, and true for having minimum guaranteed death benefits.
    • Term Insurance: False that it builds cash value, as it is strictly risk protection during the term.

    Premium Variations and License Requirements

    • Variable Life Policies: Have level premiums but fluctuate in cash value based on underlying investments.
    • Licensing for Variable Products: Requires both a life insurance license and a FINRA license for eligibility in sales.

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    Description

    Test your knowledge on life insurance policies with these flashcards. Learn about various terms and definitions, including modified premium whole life and jumping juvenile policies. Perfect for students or professionals looking to refresh their understanding of life insurance.

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