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Flashcards in Types of Policies and Rider Deck (15):
1

Typical exclusions or restrictions found in an accelerated death benefit include all of the following, except:
A
Engaging in illegal occupations or activities
B
Suicide
C
Accidental injury while at work
D
Intentional self-inflicted injury

C
Accidental injury while at work

2

What happens if a Return of Premium Term policy is not held to the end of term?
A
All premiums paid can be used to offset the first year cost of a traditional whole-life insurance policy
B
There will be a nominal return of premiums paid, the amount will depend upon how long the policy was in-force
C
All premiums paid can be 'rolled-over' into an annuity using the IRS Code 1035 exchange rules
D
There will be no return of any premium paid

B
There will be a nominal return of premiums paid, the amount will depend upon how long the policy was in-force

3

An insured purchases a 20-Pay Life Policy with a face amount of $25,000 and an annual premium of $1,000. The insured dies 15 years later when the cash value is $5,000. What amount will the beneficiary receive?
A
$20,000
B
$30,000
C
$15,000
D
$25,000

D
$25,000

4

Which of the following is NOT a type of Term Life Insurance Policy?
A
Decreasing
B
Variable
C
Level
D
Increasing

B
Variable

5

What type of term life insurance policy has a policy premium that can fluctuate between the current charge and a maximum rate stated in the policy based on the insurer's mortality, expenses, and investment returns?
A
Indeterminate
B
Flexible
C
Increasing
D
Adjustable

A
Indeterminate

6

If Jon dies with an outstanding policy loan of $10,000 on his $100,000 policy that has $15,000 of cash value, what will his beneficiary receive at the time of claim?
A
$115,000
B
$105,000
C
$100,000
D
$90,000

D
$90,000

7

All of the following life insurance policies have a cash value that increases based on interest being credited to the cash value, except:
A
Equity-Indexed Whole Life
B
Current Assumption Whole Life
C
Universal Life
D
Variable Universal Life

D
Variable Universal Life

8

A Life Settlement Contract is a financial transaction in which the owner of a life insurance policy sells an unneeded policy to a third party for how much?
A
2 times the premium paid into the policy
B
More than the cash surrender value and less than the face value
C
3 times the cash value
D
80% of the face value of the policy if the insured is between the ages of 65 and 70

B
More than the cash surrender value and less than the face value

9

The method of premium can vary depending on the:
A
Age of the insured
B
Health of the insured
C
Insurer that issued the policy
D
Type of policy issued

D
Type of policy issued

10


A life insurance premium is paid each month. The insurer then subtracts a mortality and expense charge from the policy's cash value. This best describes which of the following life insurance policies?
A
Variable Whole Life
B
Universal Life
C
Whole Life
D
Adjustable Whole Life

B
Universal Life

11

The applicant/insured wants a term life insurance policy that will last for 20 years and is willing to risk that the insurer is managing its financial affairs properly and is not concerned about the premium of the policy down the road so long as there is a cap on how much it can ultimately become, so the producer should show him/her a(n):
A
20 year indeterminate premium term life insurance policy
B
20 year non-guaranteed level premium term life insurance policy
C
20 year guaranteed level premium term life insurance policy
D
20 year adjustable premium term life insurance policy

A
20 year indeterminate premium term life insurance policy

12

Frieda wants coverage until she has paid back her business loan in 10 years. The ideal life insurance policy with the least expense would be:
A
Universal Life
B
Variable Universal Life
C
Decreasing Term Life
D
Participating Permanent Life

C
Decreasing Term Life

13

A Guaranteed Universal Life policy is also referred to as a(n):
A
Universal Life with a No-Lapse Guarantee
B
Flexible premium adjustable life insurance
C
Traditional whole life
D
Permanent term life insurance

A
Universal Life with a No-Lapse Guarantee

14

Credit life insurance is a special form of what type of term life insurance?
A
Annually renewable 30 year
B
Level
C
Decreasing
D
Increasing

C
Decreasing

15


A married couple wants to have funds available so that the heirs to their estate have the funds necessary to pay the estate taxes. Which of the following would be the most economical and effective way to accomplish this?
A
Buy a Whole Life policy on each spouse
B
Buy a Joint Survivorship Life policy
C
Buy a Joint Life policy
D
Have one spouse buy a whole life policy and the other one a Universal Life policy

B
Buy a Joint Survivorship Life policy