Questions and Answers
What policy component decreases in decreasing term insurance?
Face amount
What type of life insurance policy would be best suited for an individual who has just borrowed $10k from his bank on a 5 year installment loan requiring monthly payments?
A decreasing term policy with face amounts of debt reducing
Which of the following is an example of a limited pay life policy?
Limited pay whole life
What would be the right policy for a client wanting both protection and savings until retirement at age 65?
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What is the death protection component of universal life insurance?
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What are the licensing requirements for someone who sells variable universal life insurance?
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What type of policy does a married couple own that covers both lives and pays the death benefit upon the death of the first insured?
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What does the death benefit in a variable universal life policy depend on?
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Which of the following features of the indexed whole life policy is not fixed?
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The death benefit in a variable universal life policy is fixed.
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Study Notes
Decreasing Term Insurance
- The face amount of decreasing term insurance reduces over time, aligning with decreasing financial obligations.
Installment Loan Life Insurance
- For a $10k, 5-year installment loan, a decreasing term policy is optimal as it matches the declining debt amount with face amount reductions over the loan period.
Limited Pay Whole Life Policy
- Limited pay policies require all premiums to be paid by age 65, while the policy matures when the insured reaches age 100, ensuring coverage without lifelong payments.
Protection and Savings Policy
- Limited pay whole life is suitable for clients seeking protection and savings until retirement at 65, providing lifetime coverage after premium payments cease.
Universal Life Insurance Structure
- The death protection component of universal life insurance is based on annually renewable term coverage, with the policy consisting of an insurance component and a cash account.
Licensing for Variable Universal Life Insurance
- Selling variable universal life insurance requires both life insurance and securities licenses to ensure comprehensive understanding of the products.
Joint Life Policy
- A joint life policy covers two individuals and pays out upon the death of the first, with blended rates for premiums, ending the policy after the first death occurs.
Variable Universal Life Policy Death Benefit
- The death benefit of a variable universal life policy is variable and influenced by the performance of a separate account, risking increases or decreases based on investment outcomes.
Indexed Whole Life Policy Features
- The indexed whole life policy features that can vary include premium costs, death benefits, policy period, and cash value growth, offering flexibility in different aspects.
Misconceptions about Variable Universal Life Policy
- A common misconception is that the death benefit in a variable universal life policy is fixed; in reality, it fluctuates based on performance, contrary to traditional fixed policies.
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Description
This quiz includes flashcards focused on life insurance policies, particularly decreasing term insurance and limited pay life policies. Test your understanding of face amounts, loans, and the best suited life insurance options for specific situations. Perfect for students and professionals in the field of insurance.
