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Life Insurance > Policy Review Test > Flashcards

Policy Review Test Flashcards

1
Q

Which policy requires that you have to have a security license to market or sell this policy?
A. Family Maintenance Policy
B. Whole Life Policy
C. Family Income Policy
D. Variable Whole Life Policy

A

D. Variable Whole Life Policy

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2
Q

Another name for “Options for the Living” in a Whole Life Policy is what?
A. Waiver of Premium Option
B. Corridor Options
C. Loading Option
D. Nonforfeiture Options

A

D. Nonforfeiture Options

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3
Q

What option in a Universal Life Policy pays the initial face amount plus the cash value as a death benefit?
A. Option A
B. Option B
C. Option L
D. Option P

A

B. Option B

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4
Q

What is a Modified Endowment Contract?
A. Permanent insurance with a level term rider
B. Considered over-funded by the IRS
C. Permanent insurance with and increasing term rider
D. Not considered to be adequately funded by the IRS

A

B. Considered over-funded by the IRS

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5
Q

All of the following are features of a Universal Life policy EXCEPT:
A. Ability to invest in different investment accounts in the policy
B. Ability to raise or lower the death benefit
C. Ability to pay different premiums each year if desired
D. Ability to select between option A and option B

A

A. Ability to invest in different investment accounts in the policy

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6
Q

Which policy has cash values that are not guaranteed, but does offer flexibility?
A. Whole Life
B. Variable Life
C. Universal Life
D. Variable Universal Life

A

D. Variable Universal Life

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7
Q

Which policy pays a death benefit upon the death of the second insured?
A. Whole Life
B. Joint Life
C. Universal Life
D. Variable Universal Life

A

B. Joint Life

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8
Q

In a traditional Whole Life Policy the insurance company considers you statistically dead at age:
A. 0 years
B. 59 1/2 years
C. 65 years
D. 100 years

A

D. 100 years

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9
Q

In a Life Paid-Up at 65 the cash value equals the face amount of the policy at what age?
A. Age 0
B. Age 59 1/2
C. Age 65
D. Age 100

A

D. Age 100

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10
Q

Which life policy offers flexibility but requires that you pay a premium each year?
A. Whole Life
B. Adjustable Whole Life
C. Universal Life
D. Endowment Life

A

B. Adjustable Whole Life

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11
Q

Which policy requires that you have passed a securities exam in order to sell this product?
A. Whole Life
B. Limited Pay Life
C. Universal Life
D. Variable Universal Life

A

D. Variable Universal Life

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12
Q

Which life policy has a guaranteed death benefit as well as cash values?
A. Whole Life
B. Variable
C. Term Life
D. Variable Universal Life

A

A. Whole Life

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13
Q

According to TEFRA, and insurance policy must maintain a specified distance between the cash value and the death benefit in order to receive the death benefit income tax free. This distance is called the:
A. Waiver of premium
B. Nonforfeiture Option
C. Corridor
D. Loading

A

C. Corridor

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14
Q

In a Whole Life policy, each year the insured pays the premium, the net amount at risk to the insurance company:
A. Decreases
B. Increases
C. Stays the same
D. Ends at age 65

A

A. Decreases

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15
Q

All of the following are types of Term Life insurance EXCEPT:
A. Level
B. Modified Endowment Contract
C. Decreasing
D. Increasing

A

B. Modified Endowment Contract

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16
Q

This policy is taken out on a child. The death benefit increases five times the face amount at a specified age, usually age 21:
A. Limited Pay Life for 21 years
B. Modified Whole Life
C. Jumping Juvenile
D. Graded Premium Whole Life

A

C. Jumping Juvenile

17
Q

In a Variable Whole Life, what may change as the value of the investment portfolio changes?
A. Death Benefit
B. Premium
C. Payor Benefit
D. None of the above

A

A. Death Benefit

18
Q

If the dividends in a Whole Life policy are left to accumulate, which statement is correct?
A. The dividend and the interest earned are considered to be taxable income
B. The dividend and the interest earned are not considered taxable income
C. The dividend is not taxable income but the interest is
D. The interest is not taxable but the dividend is

A

C. The dividend is not taxable income but the interest is

Life Insurance (2 decks)

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