Questions and Answers
Which of the following are the premium payouts for a Universal life policy NOT used for?
A single premium cash value policy can be described as...
a policy that is paid up after only one payment
Which type of life insurance is normally associated with Payor Benefit rider?
juvenile insurance
Under a Modified Endowment Contract, what are the likely tax consequences?
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What happens to the coverage of a children's term rider when that child reaches a certain specified age?
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An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called...
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What does the term 'level' in Level Term describe?
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When a decreasing term policy is purchased, it contains a decreasing death benefit and...
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A partial surrender is allowed in which of the following life policies?
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Level premium permanent insurance accumulates a reserve that will eventually...
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Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because...
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What kind of policy is Joe referring to if his insurance policy has a face amount of $300,000, accumulates a cash value of $50,000, and later has a face amount of $350,000?
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How are survivorship life insurance policies helpful in estate planning?
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A life insurance policy written on one contract for two people in which it is payable upon the first death is called...
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A Modified Endowment Contract (MEC) is best described as...
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Which product would allow Jonas to add coverage for his two children under a whole life insurance policy?
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A securities license is required for a life insurance provider to sell...
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What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?
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Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?
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A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a...
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Study Notes
Universal Life Policies
- Premium payouts are not used for separate account investments.
- A universal life policy allows partial surrender of cash value interest-free.
Single Premium Policies
- A single premium cash value policy is fully paid up with only one payment.
Specialized Riders
- Juvenile insurance typically includes a Payor Benefit rider.
- Coverage from a children's term rider is eliminated when the child reaches a certain age.
Modified Endowment Contracts (MEC)
- Pre-death distributions from MECs are taxable due to their investment nature.
- A MEC accumulates cash values above IRS limits.
Insurance Policies Overview
- Level Term insurance refers to consistent face amounts throughout the policy duration.
- Decreasing term policies feature a decreasing death benefit but level premiums.
- Joint life policies pay out upon the first death of either of the two insured parties.
- Last survivor life insurance covers multiple people with benefits payable upon the last person's death.
Cash Value Accumulation
- Level premium permanent insurance builds a reserve that equals the face amount over time.
- Universal life policies allow the cash value to accumulate beyond the face amount, as seen in specific examples.
Surviving Beneficiaries and Estate Planning
- Survivorship life insurance policies aid in estate planning by providing funds for tax payments.
Types of Life Insurance
- An endowment policy pays the face amount if the insured survives the specified period.
- A limited pay policy requires premium payments for only a set number of years.
Licensing Requirements
- Selling variable life insurance requires a securities license.
Additional Insurance Features
- Whole life insurance policyholders can add child term riders for additional coverage.
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Description
Test your knowledge with these flashcards from XCEL Chapter 4 Part 1. This quiz covers key concepts in life insurance, including premium payouts and policy types. Perfect for students preparing for the insurance licensing exam.
