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Questions and Answers
Which of the following are the premium payouts for a Universal life policy NOT used for?
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 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?
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?
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?
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...
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?
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...
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?
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...
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...
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?
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?
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...
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...
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?
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...
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?
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?
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...
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.
Studying That Suits You
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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.
