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Questions and Answers
Which of the following best describes annually renewable term insurance?
Which of the following best describes annually renewable term insurance?
Which of the following policies would be classified as a traditional level premium contract?
Which of the following policies would be classified as a traditional level premium contract?
Which of the following would help prevent a universal life policy from lapsing?
Which of the following would help prevent a universal life policy from lapsing?
Your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
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The premium of a Straight Life policy steadily decreases over time.
The premium of a Straight Life policy steadily decreases over time.
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At age 30, an applicant wants a policy that can be modified as his insurance needs change. Which policy would most likely fit his needs?
At age 30, an applicant wants a policy that can be modified as his insurance needs change. Which policy would most likely fit his needs?
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The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
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All of the following are true regarding a decreasing term policy EXCEPT:
All of the following are true regarding a decreasing term policy EXCEPT:
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To sell variable life insurance policies, an agent must receive all of the following EXCEPT:
To sell variable life insurance policies, an agent must receive all of the following EXCEPT:
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In a group life insurance policy, the employer may select all of the following EXCEPT:
In a group life insurance policy, the employer may select all of the following EXCEPT:
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A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?
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What type of premium do both Universal Life and Variable Universal Life policies have?
What type of premium do both Universal Life and Variable Universal Life policies have?
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An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
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A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy:
A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy:
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The premium of a survivorship life policy compared with that of a joint life policy would be:
The premium of a survivorship life policy compared with that of a joint life policy would be:
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Concerning Juvenile Life insurance, it can be any life insurance purchased by a minor.
Concerning Juvenile Life insurance, it can be any life insurance purchased by a minor.
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All of the following could own group life insurance EXCEPT:
All of the following could own group life insurance EXCEPT:
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Which of the following best defines target premium in a universal life policy?
Which of the following best defines target premium in a universal life policy?
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An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called:
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called:
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Which type of life insurance policy generates immediate cash value?
Which type of life insurance policy generates immediate cash value?
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The LEAST expensive first-year premium is found in which of the following policies?
The LEAST expensive first-year premium is found in which of the following policies?
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An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
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An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
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An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
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What is the purpose of establishing the target premium for a universal life policy?
What is the purpose of establishing the target premium for a universal life policy?
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Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid:
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid:
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Which component increases in the increasing term insurance?
Which component increases in the increasing term insurance?
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Which of the following is an example of a limited-pay life policy?
Which of the following is an example of a limited-pay life policy?
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Study Notes
Life Insurance Policies
- Annually renewable term insurance is level term insurance that offers significant coverage at a low cost, requiring proof of insurability at each renewal.
- Traditional level premium contracts include Straight Life policies, which have fixed premium payments and guaranteed face amounts throughout the insured's life.
- To prevent a universal life policy from lapsing, a target premium should be paid to cover insurance costs and keep the policy active.
- Limited pay whole life insurance allows clients to stop making premium payments by a certain age while maintaining coverage until death or age 100.
- A Straight Life policy features a consistent premium throughout the insured's lifetime and guarantees cash value by the third policy year, contrary to the misconception that premiums decrease over time.
- Adjustable Life policies can be modified to accommodate changing insurance needs, allowing increases or decreases in benefits as long as premiums are sufficient.
- Increasing the death benefit on an adjustable life policy requires proof of insurability from the policy owner.
- Decreasing term policies have a level premium while the death benefit declines over the policy's term, but the premium does not decrease.
- Selling variable life insurance necessitates FINRA registration, a securities license, and a state-issued life insurance license; SEC registration is not required for agents.
- In group life insurance, employees select their own beneficiaries, while employers determine the type, amount, and premium payor for the policy.
- Joint Life policies cover two lives and pay out upon the death of the first insured, effectively ending coverage afterward.
- Both Universal Life and Variable Universal Life policies have flexible premiums, allowing policyholders to choose payment amounts.
- Limited-pay Life policies require premium payments for a set number of years, after which the policy is considered fully paid up.
- Annually renewable term policies subject premiums to annual increases based on the insured’s age at renewal, with no cash value accumulation.
- The premium for survivorship life insurance is generally lower than that for joint life policies due to the payout being based on the second death rather than the first.
- Juvenile Life insurance can be taken out by a parent's or guardian's application, not necessarily initiated by the minor insured.
- Groups purchasing group life insurance must be formed for purposes other than obtaining life insurance to qualify.
- The target premium in universal life insurance is aimed at keeping the policy in force throughout its lifetime.
- Single premium whole life requires a one-time premium payment at policy initiation and builds immediate cash value.
- Decreasing term policies are suitable for individuals with installment loans, as the policy's face amount decreases with the debt.
- The premium in a 20-pay whole life policy is paid over 20 years or until the death of the insured.
- Increasing term policies maintain level premiums while their death benefits increase annually throughout the policy's term.
- Life Paid-up at Age 65 exemplifies a limited-pay life policy, where all premiums are paid by age 65, with the policy maturing at age 100.
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Description
This quiz covers various types of life insurance policies, including annually renewable term insurance, straight life policies, and universal life policies. Understand the differences between various plans and their features to make informed decisions about life insurance. Test your knowledge on coverage, premiums, and policy management.
