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Which statement about a whole life policy is correct? |
Cash value may be borrowed against |
|
All of these are characteristics of an Adjustable Life policy EXCEPT |
face amount can be adjusted using policy dividends |
|
What type of life insurance incorporates flexible premiums and an adjustable death benefit? |
universal life |
|
Which of the following actions is NOT possible with a Universal Life policy? |
Premiums may be applied as a credit against income tax |
|
What type of life policy covers 2 lives and pays the face amount after the first one dies? |
Joint life policy |
|
A Renewable Term Policy is renewable at the option of the |
insured |
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J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? |
20 pay life |
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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 of the policy. Which of these statements made by the producer would be correct? |
20-Pay Life accumulates cash value faster than Straight Life |
|
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? |
Ten-Year Endowment |
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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 or risk. Which product would S be advised to purchase? |
Equity index insurance |
|
Under a Renewable Term policy, |
the renewal premium is calculated on the basis of the insured’s attained age |
|
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? |
Decreasing Term |
|
Which of the following types of policies pays a benefit if the insured goes blind? |
AD&D |
|
A life insurance policy that provides a policyowner with cash value along with a level face amount is called |
whole life |
|
Which type of policy is considered to be overfunded, as stated by IRS guidelines? |
Modified Endowment Contract |
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N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a life insurance policy with level premiums, permanent protection, and be paid-up at retirement. Which of these should N purchase? |
30 pay life |
|
What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? |
Family Maintenance Policy |
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A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision? |
payor provision |
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What type of life insurance gives the greatest amount of coverage for a limited period of time? |
term life |
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A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? |
universal life |
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D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed? |
level term |
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How does a typical Variable Life Policy investment account grow? |
Through mutual funds, stocks, bonds |
|
A policy that becomes a Modified Endowment Contract (MEC) |
will lose many of its tax advantages |
|
Life insurance that covers an insured’s whole life with level premiums paid over a limited time is called |
limited pay life |
|
Who benefits in Investor-Originated Life Insurance (IOLI) when the insured dies? |
policyowner |
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Which of the following statements is CORRECT about the period in which a Term Policy can be converted? |
it varies according to contract |
|
A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as |
variable life |
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What type of policy would offer a 40-year old the quickest accumulation of cash value? Paid-up at 65 |
20 pay life |
|
A Limited-Pay Life policy has |
premium payments limited to a specified number of years |
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Which of these is an element of a Variable Life policy? |
a fixed, level premium |
|
A Whole Life Insurance Policy endows when the |
Cash value equals the death benefit |
|
Credit life insurance is typically issued with which of the following types of coverage? |
decreasing term |
|
A variable insurance policy |
does not guarantee a return on its investment accounts |
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Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? |
increase face amount |
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L, aged 50, and L’s spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L’s spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? |
L’s spouse dies at age 66. |
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What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? |
whole life |
|
A term life insurance policy matures |
upon the insured’s death during the term of the policy |
|
When a life insurance policy exceeds certain IRS table values, the result would create which of the following? |
Modified Endowment Contract (MEC) |
|
How long does the coverage normally remain on a limited-pay life policy? |
age 100 |
|
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? |
$20,000 death benefit |
|
The most important factor to consider when determining whether to convert term insurance at the insured’s attained age or the insured’s original age is |
the cost |
|
What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? |
family maintenance policy |
|
If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase |
A Whole Life Policy with an Other Insured Rider |
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Which type of life policy contains a monthly mortality charge as well as self-directed investment choices? |
Variable Universal Life |
|
What type of life policy covers two people and pays upon the death of the last insured? |
Survivorship |
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S is covered by a whole life policy. Which insurance product can cover his children? |
child term rider |
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K buys a policy where the premium stays fixed for the first 5 years. The premium then increases in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of policy is this? |
Modified Whole Life |
|
Which of the following combination plans is designed to protect an insured from an unpaid mortgage balance upon premature death? |
Joint Life |
|
Which is true concerning a Variable Universal Life policy? |
Policyowner controls where the investment will go and selects the amount of the premium payment |
|
Which of these life products is NOT considered interest-sensitive? |
modified whole life |
|
All of these statements about Equity Indexed Life Insurance are correct EXCEPT |
The premiums can be lowered or raised, based on investment performance |
|
The investment gains from a Universal Life Policy usually go toward |
cash value |
|
The amount of coverage on a group credit life policy is limited to |
the insureds total loan value |
|
When applied to Whole Life insurance, the word "straight" denotes |
The duration of premium payments |
|
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them EXCEPT for |
modified whole life |
|
Which statement is correct regarding the premium payment schedule for whole life policies? |
Premiums are payable throughout the insured’s lifetime/ coverage lasts until death of the insured |
|
K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?. |
level |
|
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? |
conversion |
|
Term insurance has which of the following characteristics? |
expires at the end of the policy period |
|
Which of these would be considered a Limited-Pay Life policy? 10-year Renewable and Convertible Term |
Life Paid-Up at Age 70 |
|
What kind of premium does a Whole Life policy have? |
level |
|
Which of the following types of policies BEST identifies one in which the cash value may fluctuate to reflect changing assumptions regarding mortality cost, interest, and expense factors? |
universal life |
|
Additional coverage can be added to a Whole Life policy by adding a(n) |
decreasing term rider |
|
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? |
10 years |
|
What type of life insurance are credit policies issued as? |
term |
|
What kind of life insurance product covers children under their parent’s policy? |
term rider |
|
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 that 20 year period. What type of policy should P purchase? |
family maintenance policy |
|
F needs life insurance that provides coverage for only a limited amount of time with a death benefit that changes regularly according to a schedule. What kind of policy is needed? |
decreasing term policy |
|
Which of these characteristics is consistent with a Straight Life policy? |
Premiums are payable for as long as there is insurance coverage in force |
|
Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? |
Whole life policy with other insured rider |
|
Variable Whole Life Insurance can be described as |
both an insurance and securities product |
|
Which of the following policies combines investment choices with a form of Term coverage? |
variable universal life |
|
Which of the following features of a group Term Life policy enables an individual to leave the group and continue his or her insurance without providing evidence of insurability? |
Conversion privilege |
|
M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is |
modified premium life |
|
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the |
Cost of insurance |
|
What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? |
Decreasing term |
|
Which of these statements describe a Modified Endowment Contract (MEC)? |
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract |
|
A 15-year mortgage is best protected by what kind of life policy? |
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract |
|
When is the face amount paid under a Joint Life and Survivor policy? |
upon death of the last insured |
|
When is the face amount of a Whole Life policy paid? |
When the insured dies or at the policy’s maturity date, whichever happens first |
|
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? |
variable life |
|
Which statement is TRUE regarding a Variable Whole Life policy? |
A minimum guaranteed Death benefit is provided |
|
Variable Life products require a producer to |
hold a Life Insurance license and a Securities license |
|
A Family Income Policy is a combination of Whole Life and |
decreasing term |
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Which of the following characteristics is CORRECT about Interest Sensitive Whole Life? |
There is a flexible premium payment |
|
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? |
Renewable |
|
K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? |
Endowment at Age 65 |
|
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? |
convertible term |
|
Whole Life insurance policies are contractually guaranteed to provide each of the following EXCEPT |
partial withdrawal features beyond a surrender charge period |
|
A(n) ______ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities. |
variable |
|
What kind of special need would a policyowner require with an Adjustable Life insurance policy? |
flexible premiums |
|
Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling? |
variable life |
|
What type of insurance offers permanent life coverage with premiums that are payable for life? |
whole life |
|
Credit Life insurance is |
issued in an amount not to exceed the amount of the loan |
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