types of policies

Question 1

In term policies, what happens to the premium throughout the term of the policy

Answer 1

The premium remains level

Question 2

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?

Answer 2

20-year level term

Question 3

what does level refer to in level term insurance?

Answer 3

Face amount

Question 4

What happens to the premium in an annually renewable term life policy?

Answer 4

The premium increases with each renewal

Question 5

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?

Answer 5

Decreasing term

Question 6

In annually renewable term policies, what is the annual premium based upon?

Answer 6

The insured’s attained age

Question 7

what type of life insurance policy provides permanent protection?

Answer 7

Whole life

Question 8

What policy component must decrease in decreasing term insurance?

Answer 8

Face amount

Question 9

What type of premium is charged on a straight life policy?

Answer 9

a level premium for the life of the insured?

Question 10

whole life policies provide protection until the insured reaches what age?

Answer 10

Age 100

Question 11

What are the living benefits of whole life insurance?

Answer 11

Loan Values

Question 12

The policy owner 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?

Answer 12

Age 100

Question 13

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 portion of the death benefit will be paid to the beneficiary?

Answer 13

The full death benefit

Question 14

a whole life policy that requires that the policyowner only pays premiums for a specified number of years is known as what kind of policy?

Answer 14

Limited-pay whole life

Question 15

what is the major difference between the most common types of whole life policies: Straight Life, Limited Payment and Single Premium?

Answer 15

Premium payment mode

Question 16

who is entitled to the cash values in a life insurance policy?

Answer 16

The policy owner

Question 17

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid for what time period?

Answer 17

For 20 years or until the insured’s death, which ever comes first.

Question 18

When would a 20-pay whole life policy endow?

Answer 18

When the insured reaches age 100.

Question 19

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?

Answer 19

Single premium whole life

Question 20

What type of whole life insurance policy generates immediate cash value?

Answer 20

Single premium whole life

Question 21

Universal life policies have two types of interest rates. What are they?

Answer 21

Guaranteed and current

Question 22

When does an adjustable life policy accumulate cash value?

Answer 22

When the premiums paid are more then the cost of the policy.

Question 23

In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?

Answer 23

Universal life

Question 24

What elements of an adjustable life policy can be changed by the policyowners?

Answer 24

The amount and payment period of the premium, the face amount, and the period for protection.

Question 25

Regarding taxation, how does the cash value of a universal life policy accumulate?

Answer 25

Tax deferred

Question 26

The death protection component of a universal life policy is expressed as what type of coverage?

Answer 26

Annually renewable term

Question 27

What universal life option has a gradually increasing cash value and a level death benefit?

Answer 27

Option A

Question 28

Under Option B in a universal life policy, what happens to the death beneift?

Answer 28

The death benefit increases each year by the amount of the cash value increases