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Chapter 4 life policies A Renewable Term Life insurance policy allows the policy owner the right to renew the policy A at anytime the policy owner chooses B as many times as the policy owner chooses C paying the same premium as before the renewal D without producing proof of insurability - Answer D without producing proof of insurability What is the automatic continuance of insurance coverage referred to as A renewal B reinstatement C resumption D renovation - Answer A renewal Term insurance is appropriate for someone who A seeks living benefits for themselves B seeks a policy that builds cash value C seeks temporary protection and lower premiums D seeks permanent protection and higher premiums - Answer C seeks temporary protection and lower premiums The type of policy which pays on the death of the last person is called A joint life B survivorship C dual D shared - Answer B survivorship A policy owner may change two policy features on what type of life insurance A modified whole B deceasing term C adjustable
D whole - Answer C adjustable The statement which best describes the relationship between the premiums of a whole life policy and d the premium payment period is A the shorter payment period, the lower premium B longer payment period, higher premiums C shorter period, higher premium D payment period has no affect on payment - Answer C shorter period, higher premium Jonas is a whole life insurance policy owner and would like to add coverage for his 2 children. Which helps him accomplish this A child term rider B payor C family maintenance D family income - Answer A child term rider How are survivorship life insurance policies helpful in estate planning A provide funds to help fund retirement B provide funds to help pay taxes C provide funds for funeral expenses D provide tax deductions for premium payments - Answer B provide funds to help pay taxes A spouse and child can be added to the primary insureds coverage as what kind of rider A dependent term B guaranteed insurability C primary term D family term - Answer D family term A business will typically use which type of life insurance to cover their employees A group
A modified endowment contract MEC is best described as A a life insurance contract which accumulates cash values higher than the IRS will allow B an annuity contract which was converted from a life insurance contract C a modified life contract which enjoys all the tax advantages of whole life insurance D a life insurance contract where all withdrawals prior to the age 65 are subject to a 100% penalty - Answer A a life insurance contract which accumulates cash values higher than the IRS will allow Shawn, Mike, and Dave are brothers who have a 100000 first to die joint life policy covering all three of their lives if Mike dies first the policy proceeds A will no longer provide insurance protection B will go to mikes estate C will be divided by probate D will not be paid until last brother dies - Answer A will no longer provide insurance protection Which type of life insurance offers flexible premiums a flexible death benefit and the choice of how the cash value will be invested A adjustable life B variable universal C universal D modified whole life - Answer B variable universal Which type of life insurance is normally associated with a payor benefit rider A juvenile B family income C spouse D term rider - Answer A juvenile Rob purchased a standard whole life policy with 500000 death benefit when he was age 30 his insurance agent told him the policy would be paid up if he
reached age 100 the present cash value of the policy equals 250000. Rob recently died at 60 the death benefit would be A 250000 B 750000 C 375000 D 500000 - Answer D 500000 What kind of life insurance policy covers two or more people with the death benefit payable upon the last persons death A dual life B joint life C last survivor life D shared life - Answer C last survivor life A permanent life insurance policy where the policy owner pays premiums for a specified number of years is called A adjustable B limited pay C level term D variable universal - Answer B limited pay Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the policy's face amount has become $600,000. Which type of life insurance policy is this? A adjustable B credit C modified D universal - Answer D universal A life insurance policy that has premiums fully paid up within a stated time period is called A stated payment
A adjustable B universal C decreasing D limited whole - Answer B universal Karissa purchases a 10 year level term life insurance policy that has a death benefit of 200000 which is true A the policy auto converts to whole life after 10 year period B face amount will remain constant and the premium will increase over 10 year period C premium will remain constant and the face amount will increase over 10 year period D both face amount and premium will stay constant - Answer D both face amount and premium will stay constant A renewable term life insurance policy can be renewed A at a predetermined date or age regardless of the insured health B only if the insured provides evidence of insurability C anytime - Answer A at a predetermined date or age regardless of the insured health Which rider will pay a death benefit if the insureds spouse dies A guaranteed insurability B family term insurance C family whole insurance D payor benefit - Answer B family term insurance What is a corridor in relation to a universal life insurance policy A the gap between the total death benefit and the policy cash value B the gap between when a claim is filed and when the death benefit is received C the amount of interest that has accumulated in cash value - Answer A the gap between the total death benefit and the policy cash value
What happens to the coverage under a children's term rider when that child reaches a certain specified age A coverage decreases auto B coverage increases C coverage remains as long as proof of insurability D coverage is eliminated - Answer D coverage is eliminated What types of life insurance are normally used for key employee indemnification A term, whole, and universal B increasing term C joint, credit, and group - Answer A term, whole, and universal All of these are valid options for adjustable life policy except A policy's premiums can be increased or decreased B policy's death benefit can be increased or decrease C a nonforfeiture option can be used to increase death benefit D policy's protection period can be modified - Answer C a nonforfeiture option can be used to increase death benefit
