Life Insurance Policies Flashcards
(50 cards)
In term policies, what happens to the premium throughout the term of the policy?
The premium remains the same
Universal life policies have two types of interest rates. What are they?
Guaranteed and current
When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured?
Evidence/Proof of insurability
What policy component must decrease in decreasing term insurance?
Face amount
What are the death benefit options in universal life policies?
Option - A level death benefit
Option - B increasing death benefit
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to the beneficiary, the premiums must be paid for what time period?
For 20 years or until the insured’s death, whichever occurs first.
Whole life policies provide protection until the insured reaches what age?
100
Who owns a group life insurance contract?
The employer
What type of life insurance policy provides permanent protection?
Permanent (whole) life
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
What type of premium is charged on a straight life policy?
Level premium on the life of the policy
A whole life policy that requires that the policy owner only pays premiums for a specified number of years is known as what kind of policy?
Limited-pay whole life
What does “level” refer to in Level term insurance?
Face amount
When would a 20-pay whole life policy endow?
When the insured reaches age 100
The death protection component of a universal life policy is expressed as what type of coverage?
Annually renewable term
If an insured terminates membership in group life insurance, to what type of insurance can the insured convert coverage?
Whole life
Regarding taxation, how does the cash value of a universal life policy accumulate?
Tax-deferred
A policy states that it will pay a specific 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
Group life insurance policies are written as what type of insurance?
Annually renewable term
What universal life option has a gradually increasing cash value and a level death benefit?
Option A has a level death benefit and an increasing cash value
What type of insurance policy can be changed from a policy with no cash value to one that generates cash value?
Convertible Term
In annually renewable term policies, what is the annual premium based upon?
The insured’s attained age
Whole life insurance policies mature when the insured reaches age 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans, what portion of the death benefit will be paid to the beneficiary?
The full death benefit
Under option B in a universal life policy, what happens to the death benefit?
The death benefit increases each year by the amount of the cash value increases.
