Chapter Exam 1 - Type of Insurance Policies
S is covered by a whole life policy. Which insurance product can cover his children? - correct answer Child Term Rider
Whole Life insurance policies are contractually guaranteed to provide each of the following EXCEPT - correct answer a) Cash value that will ultimately replace the death benefit
b)no forfeiture benefit options
c)premiums that remain fixed for the life of the policy
d) partial withdrawal features beyond a surrender charge period
Which of these characteristics is consistent with a Straight Life policy? - correct answer Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death or age 100
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? - correct answer 10 years
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - correct answer Renewable
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? - correct answer Decreasing term (The automatic premium loan provision can be incorporated into all of these policies EXCEPT decreasing term
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - correct answer Convertible term
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? - correct answer Ten- Year Endowment What type of life insurance are credit policies issued as? - correct answer Term- The type of insurance used is decreasing term, with the term matched to the length of the loan period and the decreasing insurance amount matched to the declining loan balance
When a life insurance policy exceeds certain IRS table values, the result would create which of the following? - correct answer Modified Endowment Contract (MEC)
Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period - correct answer The conversion period varies according to the contract.
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called? - correct answer Limited Pay Lift
A universal life policy is sometimes referred to as an unbundled life policy b/c the owner can see the interest earned, expense charges, and the ? - correct answer Cost of insurance
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - correct answer Family Maintenance policy
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? - correct answer Key Person Insurance
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - correct answer Variable life
Y purchased $100,000 Worth of permanent on himself and $50,000 worth of 10-year term coverage for his wife on the same policy. Which of these policies did Y Purchase? - correct answer Whole Life policy with an other Insured Rider
S is covered by a whole life policy. Which insurance product can cover his children? - correct answer Child Term Rider
Whole Life insurance policies are contractually guaranteed to provide each of the following EXCEPT - correct answer a) Cash value that will ultimately replace the death benefit
b)no forfeiture benefit options
c)premiums that remain fixed for the life of the policy
d) partial withdrawal features beyond a surrender charge period
Which of these characteristics is consistent with a Straight Life policy? - correct answer Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death or age 100
G purchased a Family Income policy at age 40, The policy has a 20-year rider period. If G were to die at age 50, how long would G's family receive an income? - correct answer 10 years
T has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this? - correct answer Renewable
Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? - correct answer Decreasing term (The automatic premium loan provision can be incorporated into all of these policies EXCEPT decreasing term
What kind of life insurance starts out as temporary coverage but can be later modified to permanent coverage without evidence of insurability? - correct answer Convertible term
T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? - correct answer Ten- Year Endowment What type of life insurance are credit policies issued as? - correct answer Term- The type of insurance used is decreasing term, with the term matched to the length of the loan period and the decreasing insurance amount matched to the declining loan balance
When a life insurance policy exceeds certain IRS table values, the result would create which of the following? - correct answer Modified Endowment Contract (MEC)
Term Life Policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period - correct answer The conversion period varies according to the contract.
Life insurance that covers an insured's whole life with level premiums paid over a limited time is called? - correct answer Limited Pay Lift
A universal life policy is sometimes referred to as an unbundled life policy b/c the owner can see the interest earned, expense charges, and the ? - correct answer Cost of insurance
P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? - correct answer Family Maintenance policy
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? - correct answer Key Person Insurance
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? - correct answer Variable life
Y purchased $100,000 Worth of permanent on himself and $50,000 worth of 10-year term coverage for his wife on the same policy. Which of these policies did Y Purchase? - correct answer Whole Life policy with an other Insured Rider
