Chapter 3

Question 1

The maturity date at which the cash value equals the face amount

Answer 1

Endow

Question 2

Face Amount

Answer 2

The amount of protection stated in a policy that is payable upon death

Question 3

Cash Value

Answer 3

An accumulated value in whole life polices that is available for policy loans and at surrender

Question 4

Rider

Answer 4

Added benefit attached to the policy for a small additional premium

Question 5

Term is _____

Answer 5

Temporary

Question 6

Juvenile Policy is written on _____

Answer 6

The life of a minor

Question 7

Jumping Juvenile

Answer 7

Automatically increases in face amount at a specific age

Question 8

Joint life or

Answer 8

First to Die

Question 9

Joint Survivorship or

Answer 9

Last to Die

Question 10

A level term policy means that the ______ remains the same throughout the lifetime of the policy

Answer 10

Policy Proceeds

Question 11

Current Assumption or Interest-Sensitive Whole Life

Answer 11

Guaranteed minimum death benefit but may increased based on the growth of the cash value

Question 12

Indexed Universal Life (Equity Indexed)

Answer 12

Policyowner decides the percentage of cash value that is invested in traditional fixed income securities

Question 13

Universal Life (Flexible Premium Adjustable Life Insurance)

Answer 13

Insurance protection and savings element (cash value) that grows on a tax-deferred basis

Question 14

Death benefits Increase or decrease based on stock market performance
Guaranteed minimum death benefits
a choice of sub accounts
fixed permium

Answer 14

Variable Life

Question 15

_________ does not have a general account, only a separate account.

Answer 15

Variable Universal life

Question 16

What does a long-term care rider do that a Living Needs (Terminal Illness) rider does not?

Answer 16

Provides up to 100% of the death benefit in a daily or monthly amount for the non-hospital expenses of a chronically ill person who cannot perform any two of the six activities of daily living

Question 17

Most group life insurance has a ______ term death benefit

Answer 17

Level

Question 18

All premiums paid to a Universal Life Policy are placed in the policy’s cash value account. The mortality charge (cost of protection) and expenses are then deducted from the cash value account.

Answer 18

Universal Life

Question 19

It allows for adjusting the mortality table used during the policy’s lifetime

Answer 19

Adjustable Life Policy

Question 20

Which rider allows a disabled insured policyowner to forgo future premiums on his or her whole life insurance policy while continuing to enjoy full policy benefits?

Answer 20

Waiver of Premium

Question 21

If a policyowner wants to increase the death benefit of an Adjustable Life Insurance policy, what is required?

Answer 21

Prove of insurability for the increase

Question 22

If a father were to add a Child Rider to a policy to cover his children, when would coverage become effective for a newborn?

Answer 22

At 14 or 15 days of age

Question 23

A Life Settlement is like a Viatical Settlement except it does not involve a _______ insured

Answer 23

Terminally ill

Question 24

_______ policies have no interest rate or death benefit guarantees

Answer 24

Variable Universal Life (VUL)

Question 25

________insurance has a current interest rate which is generally higher than the guaranteed minimum interest rate. It depends on the interest rates the insurer can earn on the assets in its general account.

Answer 25

Universal Life

Question 26

The net amount at risk in an Ordinary Whole Life Insurance Policy _________ over the life of the policy.

Answer 26

Decreases

Question 27

______ Has a guaranteed minimum face ammount

Answer 27

Variable Whole Life

Question 28

Premium is fixed and level

Answer 28

Ordinary Whole Life