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Questions and Answers
A renewable term policy is renewable at the option of the:
A renewable term policy is renewable at the option of the:
Insured
What type of policy covers two lives and pays the face amount after the first one dies?
What type of policy covers two lives and pays the face amount after the first one dies?
Joint life policy
Under a renewable term policy, how is the renewal premium calculated?
Under a renewable term policy, how is the renewal premium calculated?
The renewal premium is calculated on the basis of the insured's attained age
When is the face amount paid under a Joint Life and Survivor policy?
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?
What type of life policy covers two people and pays upon the death of the last insured?
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Which type of policy is considered to be overfunded, as stated by IRS guidelines?
Which type of policy is considered to be overfunded, as stated by IRS guidelines?
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Whole life insurance policies are contractually guaranteed to provide each of the following, except:
Whole life insurance policies are contractually guaranteed to provide each of the following, except:
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What type of life insurance gives the greatest amount of coverage for a limited period of time?
What type of life insurance gives the greatest amount of coverage for a limited period of time?
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What product would S be advised to purchase for greater gains than bonds, while protecting the principal with minimal risk?
What product would S be advised to purchase for greater gains than bonds, while protecting the principal with minimal risk?
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A(n) ______ Life policy offers the owner investment in products such as money-market funds, long-term bonds, and equities.
A(n) ______ Life policy offers the owner investment in products such as money-market funds, long-term bonds, and equities.
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All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for:
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for:
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Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
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Which type of policy is characterized by a flexible premium and death benefit, allowing the policy owner control of the investment aspect?
Which type of policy is characterized by a flexible premium and death benefit, allowing the policy owner control of the investment aspect?
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Which of these would be considered a limited-pay life policy?
Which of these would be considered a limited-pay life policy?
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What does a variable insurance policy guarantee?
What does a variable insurance policy guarantee?
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A statement is true regarding a variable whole life policy.
A statement is true regarding a variable whole life policy.
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A life insurance policy that provides a policy owner with cash value along with a level face amount is called:
A life insurance policy that provides a policy owner with cash value along with a level face amount is called:
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What type of policy would offer a 40-year-old the quickest accumulation of cash value?
What type of policy would offer a 40-year-old the quickest accumulation of cash value?
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Credit life insurance is issued in an amount not to exceed the amount of the:
Credit life insurance is issued in an amount not to exceed the amount of the:
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Which types of term insurance may be renewable?
Which types of term insurance may be renewable?
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Study Notes
Life Insurance Policies Overview
- Renewable term policies allow the insured to renew the policy at their discretion.
- Joint life policies cover two individuals and pay out upon the death of the first insured.
- In renewable term policies, renewal premiums are determined based on the insured's attained age.
Joint Life and Survivor Policies
- Joint Life and Survivor policies pay the face amount after the last insured individual passes away.
- Survivorship policies also cover two people and payout only upon the death of the last insured.
Tax and Regulatory Aspects
- Modified Endowment Contracts are classified by the IRS as overfunded insurance policies.
- Variable life policies provide investment opportunities in diverse products, including money-market funds and equities.
- To sell certain insurance products, agents must hold proper FINRA securities registration, except for Modified Whole Life.
Whole and Term Life Insurance
- Whole life insurance guarantees a cash value and level face amount throughout the policy’s life, but does not usually allow partial withdrawals outside of a surrender charge period.
- Term life insurance provides maximum coverage for a specific period, making it favorable for short-term needs.
- Equity index insurance is recommended for individuals seeking greater returns than bonds while maintaining principal protection.
Cash Value Accumulation
- A 20-pay life policy will yield the quickest cash value accumulation for a 40-year-old.
- Limited-pay life policies, such as Life Paid-Up at Age 70, require premiums to be paid over a shorter duration.
Specific Policy Features
- Variable insurance policies do not guarantee returns on investment accounts.
- Variable universal life policies offer flexibility in premium payments and death benefits while allowing policyholders to manage investment aspects.
- Credit life insurance is limited to coverage amounts not exceeding the outstanding loan balance.
Insurance Benefits
- In the event of death in Investor-Originated Life Insurance (IOLI), the policy owner receives the benefit.
- A minimum guaranteed death benefit is stipulated in variable whole life policies, ensuring some level of assurance for policyholders.
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Description
Test your knowledge on life insurance policies with this quiz covering Chapter 1. The questions focus on key terms and definitions essential for understanding renewable term and joint life policies. Perfect for those studying in the insurance field.
