Podcast
Questions and Answers
Which statement is true regarding a variable whole life policy?
Which statement is true regarding a variable whole life policy?
True (A)
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?
- Universal Life (correct)
- Term Life
- Whole Life
- Endowment Policy
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?
- Health Insurance
- Life Insurance
- Accidental Death and Dismemberment (AD&D) (correct)
- Whole Life
What kind of life policy is best to protect a 15-year mortgage?
What kind of life policy is best to protect a 15-year mortgage?
What type of term coverage allows coverage after the initial policy period?
What type of term coverage allows coverage after the initial policy period?
What kind of life insurance policy provides a cash value along with a level face amount?
What kind of life insurance policy provides a cash value along with a level face amount?
What is the term for a policy where the premium stays fixed for the first 5 years and increases thereafter?
What is the term for a policy where the premium stays fixed for the first 5 years and increases thereafter?
What type of insurance policy supplies an income stream over a set time after the insured dies?
What type of insurance policy supplies an income stream over a set time after the insured dies?
What does Stranger-Owned Life Insurance (STOLI) involve?
What does Stranger-Owned Life Insurance (STOLI) involve?
What will an insurance company pay the beneficiary of a $20,000 20-Year Endowment policy if the insured dies after 10 years?
What will an insurance company pay the beneficiary of a $20,000 20-Year Endowment policy if the insured dies after 10 years?
The amount of coverage on a group credit life policy is limited to what?
The amount of coverage on a group credit life policy is limited to what?
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies?
What has limited premium payments to a specified number of years?
What has limited premium payments to a specified number of years?
Premiums may be applied as a credit against income tax with a Universal Life policy.
Premiums may be applied as a credit against income tax with a Universal Life policy.
Under a graded premium policy, how are the premiums structured?
Under a graded premium policy, how are the premiums structured?
Modified Whole Life is considered interest-sensitive.
Modified Whole Life is considered interest-sensitive.
Premiums for whole life policies are payable throughout the insured's lifetime.
Premiums for whole life policies are payable throughout the insured's lifetime.
A life policy with a fluctuating death benefit based on underlying investments is known as?
A life policy with a fluctuating death benefit based on underlying investments is known as?
Premiums for a Straight Life policy are payable for as long as there is coverage in force.
Premiums for a Straight Life policy are payable for as long as there is coverage in force.
What advantage does the renewability feature give to a term policy?
What advantage does the renewability feature give to a term policy?
Which information is NOT required in a Whole Life policy?
Which information is NOT required in a Whole Life policy?
What defines a Modified Endowment Contract (MEC)?
What defines a Modified Endowment Contract (MEC)?
All of these are characteristics of an Adjustable Life policy EXCEPT?
All of these are characteristics of an Adjustable Life policy EXCEPT?
What type of policy did Y purchase that includes an other insured rider?
What type of policy did Y purchase that includes an other insured rider?
Credit Life insurance is issued in an amount not to exceed what?
Credit Life insurance is issued in an amount not to exceed what?
F needs a life insurance policy that covers a limited time with changing death benefits. What kind of policy does he need?
F needs a life insurance policy that covers a limited time with changing death benefits. What kind of policy does he need?
What need is satisfied by adjustable life insurance?
What need is satisfied by adjustable life insurance?
A policy that becomes a Modified Endowment Contract (MEC) will lose many tax advantages.
A policy that becomes a Modified Endowment Contract (MEC) will lose many tax advantages.
Which policy requires an agent to register with NASD before selling?
Which policy requires an agent to register with NASD before selling?
Which of these types of life insurance allows the policy owner to choose from a selection of investment options?
Which of these types of life insurance allows the policy owner to choose from a selection of investment options?
Which type of life policy contains both a monthly mortality charge and self-directed investment choices?
Which type of life policy contains both a monthly mortality charge and self-directed investment choices?
Credit life insurance is typically issued with which type of coverage?
Credit life insurance is typically issued with which type of coverage?
Which of these would be considered a Limited Pay Life policy?
Which of these would be considered a Limited Pay Life policy?
Cash value in a whole life policy may be borrowed against.
Cash value in a whole life policy may be borrowed against.
How long does coverage normally remain on a limited pay life policy?
How long does coverage normally remain on a limited pay life policy?
What kind of life insurance starts as temporary coverage but can be modified to permanent coverage?
What kind of life insurance starts as temporary coverage but can be modified to permanent coverage?
What kind of life insurance provides the greatest protection for a temporary time period?
What kind of life insurance provides the greatest protection for a temporary time period?
What type of policy does P own if the face amount is paid if he lives to age 70?
What type of policy does P own if the face amount is paid if he lives to age 70?
What type of rider can cover S's children under a whole life policy?
What type of rider can cover S's children under a whole life policy?
Which type of policy allows control over the investment aspect and has adjustable death benefits?
Which type of policy allows control over the investment aspect and has adjustable death benefits?
The investment gains from a Universal Life Policy usually go toward what?
The investment gains from a Universal Life Policy usually go toward what?
What does a Face Amount Plus Cash Value policy pay at the insured's death?
What does a Face Amount Plus Cash Value policy pay at the insured's death?
What type of life insurance are credit policies issued as?
What type of life insurance are credit policies issued as?
When is the face amount of a Whole Life policy paid?
When is the face amount of a Whole Life policy paid?
What kind of policy accumulates cash value faster in the early years?
What kind of policy accumulates cash value faster in the early years?
What kind of term life policy is used for covering an insured's mortgage balance?
What kind of term life policy is used for covering an insured's mortgage balance?
What type of policy should N purchase for level premiums, permanent protection, and paid-up at retirement?
What type of policy should N purchase for level premiums, permanent protection, and paid-up at retirement?
What is true concerning a Variable Universal Life policy?
What is true concerning a Variable Universal Life policy?
Whole Life policies provide partial withdrawal features beyond a surrender charge period.
Whole Life policies provide partial withdrawal features beyond a surrender charge period.
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?
Variable Life products require a producer to hold what?
Variable Life products require a producer to hold what?
Which type of permanent life insurance policy offers the highest initial cash value?
Which type of permanent life insurance policy offers the highest initial cash value?
What is the policy type that has a death benefit that adjusts periodically and is for a specific time?
What is the policy type that has a death benefit that adjusts periodically and is for a specific time?
The Universal Life Policy is called an unbundled Life Policy because it shows costs including what?
The Universal Life Policy is called an unbundled Life Policy because it shows costs including what?
What type of policy covers two lives and pays after the first one dies?
What type of policy covers two lives and pays after the first one dies?
How does a typical Variable Life Policy investment account grow?
How does a typical Variable Life Policy investment account grow?
Insurance that covers an insured's entire life with level premiums paid for a limited time is called?
Insurance that covers an insured's entire life with level premiums paid for a limited time is called?
Which of the following life insurance policies combines term insurance with an investment element?
Which of the following life insurance policies combines term insurance with an investment element?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, what is that called?
When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, what is that called?
Which feature in a group Term Life policy enables continuity of insurance post-group?
Which feature in a group Term Life policy enables continuity of insurance post-group?
Which policy type is considered overfunded according to IRS guidelines?
Which policy type is considered overfunded according to IRS guidelines?
Variable Whole Life Insurance can accurately be described as?
Variable Whole Life Insurance can accurately be described as?
When does the whole life insurance policy endow?
When does the whole life insurance policy endow?
What type of product requires proper FINRA securities registration for sale?
What type of product requires proper FINRA securities registration for sale?
What is the most important factor when deciding to convert term insurance?
What is the most important factor when deciding to convert term insurance?
What policy best meets N's needs for insurance that allows changes as life evolves?
What policy best meets N's needs for insurance that allows changes as life evolves?
What type of policy does D need for coverage for a limited time at the lowest premium?
What type of policy does D need for coverage for a limited time at the lowest premium?
What type of life insurance policy did K purchase that paid 10% interest in the early years?
What type of life insurance policy did K purchase that paid 10% interest in the early years?
Study Notes
Types of Life Insurance Policies
- Variable Whole Life Policy: Guarantees a minimum death benefit.
- Universal Life Insurance: Combines term insurance with an investment component.
- Accidental Death & Dismemberment (AD&D): Provides benefits for blindness.
- Decreasing Term Insurance: Ideal for protecting a 15-year mortgage.
- Renewable Term Policy: Allows continuation of coverage after the initial term.
- Whole Life Insurance: Offers a cash value accumulation alongside a level death benefit.
- Modified Whole Life: Features fixed premiums for initial years, increasing thereafter.
- Family Maintenance Policy: Supplies an income stream upon the insured's death.
- Stranger-Originated Life Insurance (STOLI): Involves purchasing life insurance solely to sell to a third party without insurable interest.
Policy Benefits and Coverage
- Endowment Policies: Beneficiary receives the face amount if insured dies or upon maturity.
- Credit Life Insurance: Coverage limited to the insured's total loan value, typically issued as decreasing term insurance.
- Investor-Originated Life Insurance (IOLI): Benefit paid to the policy owner upon the insured's death.
- Limited Pay Life Policies: Premium payments are restricted to a specific number of years.
- Convertible Term Insurance: Can be converted to permanent coverage without proof of insurability.
Policy Characteristics
- Universal Life Policy: Known as unbundled due to transparency in interest, insurance costs, and expenses.
- Adjustable Life Policies: Provide flexibility in face amounts and premiums but do not allow adjustments using dividends.
- Equity Indexed Life Insurance: Combines life insurance with equity markets but does not allow changes to premiums based on performance.
- Variable Life Insurance: Includes underlying equity investments and is characterized by no guaranteed returns on investment accounts.
Premium and Benefits Structure
- Graded Premium Policies: Lower premiums in early years, increasing thereafter.
- Whole Life Policies: Provide level premiums throughout the insured's lifetime and may allow cash value loans.
- Family Income Policies: Pay monthly income to beneficiaries for a specified period after death, with a lump sum at the end.
- Joint Life Policies: Pay face amounts upon the death of the first insured.
Policy Transactions and Alterations
- Automatic Premium Loan: Not available for decreasing term policies.
- Conversion Privilege: Allows continuation of coverage without proof of insurability upon leaving a group policy.
- Modified Endowment Contracts (MEC): Result from exceeding IRS premium limits, losing tax advantages.
Insurability and Coverage Selection
- Policyowners’ Age Impact: Renewal premiums are based on the insured's ages upon renewal.
- Modified Endowment Contracts: Identify policies that surpass IRS guideline limits for life insurance.
- Term Life Insurance: Ideal for those seeking maximum coverage for a limited term.
Conclusion of Policies
- Whole Life Policies: Endow when cash value equals the death benefit.
- Universal Life Policies: Require proper securities registration for agents to sell.
- Level Premiums: Generally associated with whole life and limited pay life products.
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Description
Test your knowledge of various insurance policies with these flashcards. Each card presents a question about different aspects of life insurance, including variable whole life policies and others. Perfect for anyone looking to deepen their understanding of insurance terminology.
