Chapter 2 Flashcards
(62 cards)
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?
For 20 years or until the insured’s death, whichever occurs first.
What universal life option has a gradually increasing cash value and a level death benefit?
Option A
What happens to the cash value when a whole life insurance policy matures?
Cash value is paid to the policyowner
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
Beneficiary
If there is no named beneficiary for the annuity benefits, to which entity will the benefits be paid?
Annuitant’s estate
Whose life expectancy is taken into consideration in an annuity contract?
Annuitant
Who is entitled to the cash values in a life insurance policy?
The policyowner
In annually renewable term policies, what is the annual premium based upon?
The insured’s attained age
In a joint life policy, when is the death benefit paid?
Upon the first death
What are the death benefit options in universal life policies?
Option A - level death benefit, and Option B - increasing death benefit
What type of life insurance policy provides permanent protection?
Whole life
If an annuity provides a set amount of income for two or more persons with the income ceasing upon the first death, what type of annuity is that?
Joint life annuity
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity?
The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant’s death.
How long will a life annuity with a 15-year period certain pay?
For the life of the annuitant unless they die within the first 15 years of the annuitization period; then the payments will last for 15 years.
What type of annuity requires an agent to have a securities license?
Variable annuity
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
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?
The full death benefit
In variable universal life insurance, to what policy component does the term “variable” refer?
Cash value and death benefit
What annuity settlement option provides income payments to the annuitant for the duration of their life, and also guarantees payment for a specified number of years?
Life income with period certain
In flexible premium payment annuities, the term flexible refers to what?
Amount of premium
When would a 20-pay whole life policy endow?
When the insured reaches age 100
What type of premium is charged on a straight life policy?
A level premium for the life of the insured
If the annuitant dies before the annuitization period starts, what will the beneficiary receive?
Either the amount paid into the annuity or the cash value, whichever is greater
What is the difference between a single premium and a flexible premium payment options in a deferred annuity?
The number of payments that purchase the annuity
