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Questions and Answers
If a 10-year term life policy contains a renewability provision, the policy will renew without evidence of insurability.
If a 10-year term life policy contains a renewability provision, the policy will renew without evidence of insurability.
True (A)
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?
- Universal Life
- Whole Life
- Variable Life
- Term Life (correct)
Which policy did Y purchase?
Which policy did Y purchase?
Whole Life policy with an other shared rider
What type of policy covers 2 people and pays upon the death of the insured?
What type of policy covers 2 people and pays upon the death of the insured?
All of these insurance types require FINRA except:
All of these insurance types require FINRA except:
Which type of term insurance may be renewable?
Which type of term insurance may be renewable?
In order to sell a ________ life policy, a producer is required to register with the financial industry regulatory authority.
In order to sell a ________ life policy, a producer is required to register with the financial industry regulatory authority.
Credit Life insurance is typically issued with which type of coverage?
Credit Life insurance is typically issued with which type of coverage?
At what point does a whole life insurance policy endow?
At what point does a whole life insurance policy endow?
What kind of policy is needed for temporary coverage with a changing death benefit?
What kind of policy is needed for temporary coverage with a changing death benefit?
Which policies best fit K's need for maximum protection per dollar of annual premium?
Which policies best fit K's need for maximum protection per dollar of annual premium?
The investment gains from a Universal Life Policy usually go toward?
The investment gains from a Universal Life Policy usually go toward?
A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges and the?
A universal life policy is sometimes referred to as an unbundled life policy because the owner can see the interest earned, expense charges and the?
The cash value in a ________ life policy may fluctuate to reflect changing assumptions regarding mortality costs, interest and expense factors.
The cash value in a ________ life policy may fluctuate to reflect changing assumptions regarding mortality costs, interest and expense factors.
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. Which of these statements made by the producer would be correct?
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. Which of these statements made by the producer would be correct?
How long does coverage normally remain on a limited pay life policy?
How long does coverage normally remain on a limited pay life policy?
Credit life insurance is issued in an amount not to exceed the amount of the loan.
Credit life insurance is issued in an amount not to exceed the amount of the loan.
How does a typical Variable Life Policy investment account grow?
How does a typical Variable Life Policy investment account grow?
What type of policy is best suited for S, age 40, who wants to adjust coverage as needs change?
What type of policy is best suited for S, age 40, who wants to adjust coverage as needs change?
What type of term coverage allows for continuation after policy expiration?
What type of term coverage allows for continuation after policy expiration?
A variable insurance policy does not guarantee a return on investment accounts.
A variable insurance policy does not guarantee a return on investment accounts.
Which statement is correct regarding the premium payment schedule for whole life policies?
Which statement is correct regarding the premium payment schedule for whole life policies?
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?
Which of the following permanent life insurance policies offers the highest cash value?
Which of the following permanent life insurance policies offers the highest cash value?
Which combination plan is designed to protect against an unpaid mortgage balance upon premature death?
Which combination plan is designed to protect against an unpaid mortgage balance upon premature death?
Additional coverage can be added to a whole life policy by adding?
Additional coverage can be added to a whole life policy by adding?
Which policy requires an agent to register with the NASD before selling?
Which policy requires an agent to register with the NASD before selling?
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time?
Which life insurance policies combine term insurance with an investment element?
Which life insurance policies combine term insurance with an investment element?
Which information is not required to be included in a whole life policy?
Which information is not required to be included in a whole life policy?
What kind of life insurance policy pays a specified monthly income to a beneficiary for years and then pays a lump sum benefit at the end of that 30 years?
What kind of life insurance policy pays a specified monthly income to a beneficiary for years and then pays a lump sum benefit at the end of that 30 years?
Which of these needs is satisfied by adjustable life insurance?
Which of these needs is satisfied by adjustable life insurance?
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?
Which of these statements about equity indexed insurance is correct except?
Which of these statements about equity indexed insurance is correct except?
The combination of whole life & ________ term insurance is referred to as a family income policy.
The combination of whole life & ________ term insurance is referred to as a family income policy.
What kind of premium does a whole life policy have?
What kind of premium does a whole life policy have?
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as?
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as?
Whole life insurance is sometimes referred to as straight life. What does straight life indicate when using this phrase?
Whole life insurance is sometimes referred to as straight life. What does straight life indicate when using this phrase?
Which of these would be considered a limited pay life policy?
Which of these would be considered a limited pay life policy?
K pays 20,000 for a 20-year endowment policy for 10 years and dies in an accident. How much will the insurance company pay the beneficiary?
K pays 20,000 for a 20-year endowment policy for 10 years and dies in an accident. How much will the insurance company pay the beneficiary?
A _____ life policy offers the owner investment in products such as money market funds, long-term bonds, and equities.
A _____ life policy offers the owner investment in products such as money market funds, long-term bonds, and equities.
What kind of life policy supplies an income stream over a set period of time that starts when the insured dies?
What kind of life policy supplies an income stream over a set period of time that starts when the insured dies?
Which of the following types of policies pays a benefit if the insured goes blind?
Which of the following types of policies pays a benefit if the insured goes blind?
When is the face amount of a whole life policy paid?
When is the face amount of a whole life policy paid?
Which of these is an element of variable life policy?
Which of these is an element of variable life policy?
Variable life insurance can be described as?
Variable life insurance can be described as?
The amount of coverage on a group credit life policy is limited to?
The amount of coverage on a group credit life policy is limited to?
What kind of life policy pays either the face value upon the death of the insured or when the insured reaches age 100?
What kind of life policy pays either the face value upon the death of the insured or when the insured reaches age 100?
STOLI is when a person purchases life insurance to sell to a?
STOLI is when a person purchases life insurance to sell to a?
A 15-year mortgage is best protected by what kind of life policy?
A 15-year mortgage is best protected by what kind of life policy?
Q would like to purchase 100,000 of permanent protection on his wife and 50,000 term coverage on himself under the same policy. What kind of policy should Q purchase?
Q would like to purchase 100,000 of permanent protection on his wife and 50,000 term coverage on himself under the same policy. What kind of policy should Q purchase?
Which is true concerning a variable universal life policy?
Which is true concerning a variable universal life policy?
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?
A company that owns a life insurance policy on one of its key employees may do all of the following except?
A company that owns a life insurance policy on one of its key employees may do all of the following except?
G purchased a family income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
G purchased a family income policy at age 40. The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income?
T would like to ensure 10,000 is available in 10 years to replace a roof on his house. What kind of 10,000 policy should T purchase?
T would like to ensure 10,000 is available in 10 years to replace a roof on his house. What kind of 10,000 policy should T purchase?
A policy that becomes a Modified Endowment Contract will lose many of its tax advantages.
A policy that becomes a Modified Endowment Contract will lose many of its tax advantages.
Who benefits in IOLI when the insured dies?
Who benefits in IOLI when the insured dies?
Life insurance that covers an insured whole life with level premiums paid over a LIMITED time is called?
Life insurance that covers an insured whole life with level premiums paid over a LIMITED time is called?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these applies?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, which of these applies?
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level of risk. Which product would S be advised to purchase?
S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principal with a minimum level of risk. Which product would S be advised to purchase?
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of 20,000 at the end of the 20-year period. What kind of policy is this?
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of 20,000 at the end of the 20-year period. What kind of policy is this?
Which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan?
Which of the following policies is characterized by a flexible premium and death benefit and allows the policy owner control of the investment aspect of the plan?
Under a Renewable term policy, the renewal premium is calculated on the basis of what?
Under a Renewable term policy, the renewal premium is calculated on the basis of what?
What kind of life insurance product covers children under their parents' policy?
What kind of life insurance product covers children under their parents' policy?
A _____ term policy is normally used when covering an insured mortgage balance.
A _____ term policy is normally used when covering an insured mortgage balance.
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called?
A life policy that contains a monthly mortality charge as well as self-directed investment choices is called?
Which of the following is considered an element of a variable life policy?
Which of the following is considered an element of a variable life policy?
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Which type of life insurance gives the greatest amount of coverage for a limited period of time?
Which type of life insurance gives the greatest amount of coverage for a limited period of time?
Which of these is not interest sensitive?
Which of these is not interest sensitive?
Under a graded premium policy, the premiums
Under a graded premium policy, the premiums
A life insurance policy that provides a policy owner with cash value along with a level amount is called?
A life insurance policy that provides a policy owner with cash value along with a level amount is called?
Which of these types of policies may not have the automatic premium loan provision attached to it?
Which of these types of policies may not have the automatic premium loan provision attached to it?
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
When a life insurance policy exceeds certain IRS table values, the result would create which of the following?
What type of life insurance are credit policies issued as?
What type of life insurance are credit policies issued as?
Variable life products require a producer to?
Variable life products require a producer to?
Which of the following actions require a policy owner to provide proof of insurance in adjustable life policy?
Which of the following actions require a policy owner to provide proof of insurance in adjustable life policy?
K purchased life insurance in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much higher premium is paid because of falling interest rates. This type of policy is known as?
K purchased life insurance in 1986 which paid 10% interest in the early years of the policy. Twenty years after the purchase, she received a notice from the insurer stating that the policy will soon terminate unless a much higher premium is paid because of falling interest rates. This type of policy is known as?
Which of the following types of term life policies most likely contain a renewability feature?
Which of the following types of term life policies most likely contain a renewability feature?
Term life policies that have the ability to be converted to permanent coverage may do so during what?
Term life policies that have the ability to be converted to permanent coverage may do so during what?
Which of the following life insurance policies combine term insurance with an investment element?
Which of the following life insurance policies combine term insurance with an investment element?
What type of policy covers 2 people and pays upon the death of the last insured?
What type of policy covers 2 people and pays upon the death of the last insured?
A _______ life policy combines investment choices with a form of term coverage.
A _______ life policy combines investment choices with a form of term coverage.
Which of these types of life insurance allows the policy owner to have level premiums to also choose from a selection of investment options?
Which of these types of life insurance allows the policy owner to have level premiums to also choose from a selection of investment options?
K, age 45, and his wife, age 43, have 3 children. They purchase a family policy that covers K's wife until age 65. All of these situations would pay a death benefit except?
K, age 45, and his wife, age 43, have 3 children. They purchase a family policy that covers K's wife until age 65. All of these situations would pay a death benefit except?
K buys a policy where the premium stays fixed for the first five years. The premium increases in year 6 and stays level, all while the death benefit remains the same. What kind of policy is this?
K buys a policy where the premium stays fixed for the first five years. The premium increases in year 6 and stays level, all while the death benefit remains the same. What kind of policy is this?
All of these characteristics of an adjustable life policy except?
All of these characteristics of an adjustable life policy except?
Term insurance has which of the following characteristics?
Term insurance has which of the following characteristics?
Which of these statements describe a MEC?
Which of these statements describe a MEC?
A universal life policy is sometimes referred to as an unbundled life policy because an owner can see the interest earned, cost of insurance and?
A universal life policy is sometimes referred to as an unbundled life policy because an owner can see the interest earned, cost of insurance and?
An architect firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
An architect firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
J issued a life insurance policy with a death benefit of 100,000. She pays 600 a year in premium for the first 5 years. The premium increases to 900 per year in the 6th year and remains level after. The policy death benefit remains the same. Which type of life insurance is this?
J issued a life insurance policy with a death benefit of 100,000. She pays 600 a year in premium for the first 5 years. The premium increases to 900 per year in the 6th year and remains level after. The policy death benefit remains the same. Which type of life insurance is this?
J is a 35-year-old looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
J is a 35-year-old looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?
P owns a 25,000 life policy that pays the face amount to him if he lives to age 70 or his beneficiary if he dies before age 70. What kind of policy is this?
P owns a 25,000 life policy that pays the face amount to him if he lives to age 70 or his beneficiary if he dies before age 70. What kind of policy is this?
N is a 40-year-old applicant who would like to retire at age 70. He is looking to buy an insurance policy with level premiums, permanent protection, and paid up at retirement. Which should N purchase?
N is a 40-year-old applicant who would like to retire at age 70. He is looking to buy an insurance policy with level premiums, permanent protection, and paid up at retirement. Which should N purchase?
What type of life insurance incorporates flexible premiums and adjustable death benefit?
What type of life insurance incorporates flexible premiums and adjustable death benefit?
If a 10-year life policy contains a renewability provision, the policy will renew without evidence of insurability.
If a 10-year life policy contains a renewability provision, the policy will renew without evidence of insurability.
Which statement is true regarding a variable whole life policy?
Which statement is true regarding a variable whole life policy?
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Study Notes
Types of Insurance Policies
- A 10-year term life policy with a renewability provision will renew without requiring evidence of insurability.
- Term life insurance provides the greatest amount of coverage for a limited time period.
- Whole Life policies can include riders that provide additional coverage for other insured individuals.
- Survivorship policies cover two persons and pay upon the death of the insured.
- Modified whole life does not require FINRA registration unlike other types.
- Level term insurance can be renewable, providing flexibility for the policyholder.
- To sell a variable life policy, producers must register with the Financial Industry Regulatory Authority (FINRA).
- Credit life insurance typically uses decreasing term coverage, corresponding to the loan balance.
- Whole life insurance policies endow when cash value equals the death benefit.
- A decreasing term policy is suited for those needing coverage with a regularly changing death benefit.
- Straight life policies offer the most protection per premium dollar spent in permanent life insurance.
- Universal Life Policies typically allocate investment gains towards cash value accumulation.
- Universal life policies are called unbundled because they allow visibility into interest earned and costs.
- Cash value in universal life policies may fluctuate based on mortality costs and expenses.
- A 20 pay life policy accumulates cash value faster in the early years than a straight life policy.
- Limited pay life insurance coverage normally lasts until age 100.
- Credit life insurance amounts should not exceed the total loan balance.
- Variable Life Policies grow through mutual funds, stocks, and bonds.
- Universal life policies allow for adjustments based on changing life needs.
- Renewable term policies permit continuation of coverage after original terms expire, adjusting premiums accordingly.
- Variable life policies do not guarantee returns on investment accounts.
- Whole life policies require premiums to be paid for the insured’s lifetime, lasting until death.
- A 20 pay life policy yields rapid cash value accumulation in the early years.
- Single premium permanent life insurance typically offers the highest cash value.
- Joint life policies protect against unpaid mortgage balances upon the insured's premature death.
- Whole life insurance combines a stable death benefit with a cash value component.
- A Family Maintenance policy provides a specified monthly income for a set period after death, followed by a lump sum.
- Adjustable life insurance accommodates the insured's need for flexible premium payments.
- Variable life policies include underlying equity investments, providing potential for growth.
- Both level premiums and varying investments are characteristics of flexible variable whole life policies.
- Credit policies in life insurance are generally offered as term insurance.
- Converting a term to a whole life policy can occur without proof of good health through a conversion provision.
- Insurance exceeding certain IRS thresholds is classified as a Modified Endowment Contract (MEC).
- Key person insurance is suitable for businesses insuring vital employees, safeguarding against financial losses.
- Modified premium life policies see increasing premiums after an initial stable period.
- A family income policy combines whole life and decreasing term elements, offering regular income and a death benefit.
- Universal life insurance features flexible premiums and adjustable death benefits, making it adaptable to policyholders' needs.
- Life insurance generates an estate upon the insured’s death with guarantees on minimum death benefits.
- The death benefit under a joint life and survivor policy is paid upon the death of the last insured.
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