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What does "level" refer to in the level term insurance? |
Face amount |
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The death protection component of a universal life policy is expressed as what type of coverage? |
Annually renewable term |
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What are the death benefit options in universal life policies? |
Option A – level death benefit, and Option B – increasing death benefit |
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When does an adjustable life policy accumulate cash value ? |
When the premium paid are more than the cost of the policy |
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What is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single premium? |
Premium payment mode |
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What are the "living benefits" of whole life insurance? |
Loan values |
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If an employee wants to join group life insurance coverage outside of the open enrollment period, what would the employee have to provide? |
Evidence of insurability |
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What universal life option has a gradually increasing cash value and a level benefit? |
Option A |
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What type of life insurance policy offers pure death protection? |
Term |
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In term policies, what happens to the premium throughout the term of the policy? |
The premium remains level |
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Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premium must be paid for what time period? |
For 20 years or until the insured’s death, whichever occurs first. |
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What policy component must decrease in decreasing term insurance? |
Face amount |
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A whole life policy that required that the policyowners only pays premium for a specified number of years is known as what kind of policy? |
Limited-pay whole life |
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When would a 20-pay whole life policy endow? |
When the insured reaches age 100 |
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What elements of an adjustable life policy can be changed by the policyowners? |
The amount and payment period of the premium, the face amount, and the period for protection |
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Group life insurance policies are written as what type of insurance? |
Annually renewable term |
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Universal life policies have two types of interest rates. What are they? |
Guaranteed and current |
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The policyowner of a whole life insurance policy is also the insured. What age must the insured attain in order to receive the policy’s face amount? |
Age 100 |
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What are the characteristics of the group that underwriters will consider before issuing a group life policy? |
Group’s purpose, size, financial strength and turnover |
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A policy states that it will pay a specified face amount if the insured dies during the 20 year premium-paying period and nothing if death occurs after the 20 year period. What type of policy is this? |
20-year level term |
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Who is entitled to the cash values in a life insurance policy? |
The policyowner |
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Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what potion of the death benefit will be paid to the policy? |
The full death benefit |
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What type of whole life insurance policy generates immediate cash value? |
Single premium whole life |
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What is the main advantage of converting from group life insurance to individual coverage |
Evidence of insurability is not required |
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An individual has just borrowed 10,000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation? |
Decreasing term |
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Between adjustable life and universal life policies, which one provides more flexibility to the policyowner? |
Universal life |
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During partial withdrawal from a universal life policy, what portion, if any, will be taxed? |
Interest earned on the withdrawn cash value |
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What type of premium is charged on a straight life policy? |
A level premium for the life of the insured |
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Why are policy loans not available on term insurance? |
There is no cash value to borrow against |
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What is the purpose of establishing the target premium for a universal life policy? |
To prevent the policy from lapsing |
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What type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insured’s age 100? |
Single premium whole life |
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When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured? |
Evidence of insurability |
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What happens to the cash value when a whole life insurance policy matures? |
Cash value is paid to the policy owner |
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What type of life insurance policy is Life Paid-up at Age 65? |
Limited -pay Whole Life |
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A policyowner borrowed a portion of cash value from his whole life policy. If the loan is not repaid, how will that affect the death benefit to the beneficiary? |
The amount of the loan will be subtracted from the death benefit. |
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Who is insured under a juvenile life policy? |
A minor |
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Who owns a group life insurance contract? |
Th employer (also known as the sponsor of the group) |
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What type of life insurance policy can be changed from a policy with no cash value to one that generates cash value? |
Convertible term |
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Whole life policies provide protection until the insured reaches what age? |
Age 100 |
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If an insured terminates membership in group life insurance, to what type of insurance can the insured convert the coverage? |
Whole life |
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How is the premium determined in a joint life insurance policy? |
The premium is based on the average age of the insureds |
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What type of life insurance is best suited to cover a mortgage? |
Decreasing term |
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Regarding taxation, how does the cash value of a universal life policy accumulate? |
Tax deferred |
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In a joint life policy, when is the death benefit paid? |
Upon the first death |
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Under option B in a universal life policy, what happens to the death benefit? |
Under Option B, the death benefit increases each year by the amount of the cash value increases |
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The death protection component of a universal life policy is expressed as what type of coverage? |
Annually renewable term |
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In variable universal life insurance, to what policy component does the term ‘variable’ refer? |
Cash value and death benefit |
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What type of life insurance policy provides permanent protection? |
Whole life |
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What happens to the premium in an annually renewable term life policy? |
The premium increases with each renewal |
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In annually renewable term life policies, what is the annual premium based upon? |
The insured’s attained age |
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In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing? |
Universal life |
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What does "level" refer to in level term insurance? |
Face amount |
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