Life Insurance Policies - Provisions, Options
and Riders Exam 1 - Type of Insurance
Policies.
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?
Universal life
A universal life policy pays a death claim in the amount of the death benefit plus the savings element.
Universal life
What kind of life insurance policy covers two or more people with the death benefit payable upon the
last person's death?
Last Survivor Life insurance
Coverage of two or more individuals with the death benefit payable upon the last person's death is a
feature of last survivor insurance.
Last Survivor Life insurance
What happens to the coverage under a children's term rider when that child reaches a certain
specified age?
Coverage is eliminated
When a child reaches a certain specified age under a children's term rider, he or she is eliminated from
coverage.
Coverage is eliminated
Variable life insurance and Universal life insurance are very similar. Which of these features are held
exclusively by variable universal life insurance?
Policyowner has the right to select the investment which will provide the greatest return
The right to select the investment which will provide the greatest return pertains only to variable
universal life insurance.
Variable life insurance
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's
cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is
this?
Universal Life policy
, Which policy feature makes a universal life policy different from a whole life policy?
A flexible premium schedule
A Modified Endowment Contract (MEC) is best described as
A life insurance contract which accumulates cash values higher than the IRS will allow
A Modified Endowment Contract (MEC) can be described as a life insurance contract that has
accumulated cash values higher than the IRS allows.
Modified Endowment Contract (MEC)
A single premium cash value policy can be described as
a policy that is paid up after only one payment
The least expensive option to pay off a 30-year mortgage balance would be
decreasing term life
What is a corridor in relation to a Universal Life insurance policy?
The corridor is the gap between a Universal Life policy's total death benefit and the policy's cash value.
Which of the following are the premium payments for a Universal life policy NOT used for?
Separate account investments
Which of the following policies does NOT build cash value?
Term life insurance does not build cash value.
A Renewable Term Life insurance policy can be renewed
at a predetermined date or age, regardless of the insured's health
The type of policy which pays on the death of the last person is called
survivorship life
Index whole life insurance contains a securities component that acts as a(n)
hedge against inflation
The premium for a Modified whole life policy is
lower than the typical whole life policy during the first few years and then higher than typical for the
remainder
A life insurance policy that has premiums fully paid up within a stated time period is called
limited payment insurance
and Riders Exam 1 - Type of Insurance
Policies.
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?
Universal life
A universal life policy pays a death claim in the amount of the death benefit plus the savings element.
Universal life
What kind of life insurance policy covers two or more people with the death benefit payable upon the
last person's death?
Last Survivor Life insurance
Coverage of two or more individuals with the death benefit payable upon the last person's death is a
feature of last survivor insurance.
Last Survivor Life insurance
What happens to the coverage under a children's term rider when that child reaches a certain
specified age?
Coverage is eliminated
When a child reaches a certain specified age under a children's term rider, he or she is eliminated from
coverage.
Coverage is eliminated
Variable life insurance and Universal life insurance are very similar. Which of these features are held
exclusively by variable universal life insurance?
Policyowner has the right to select the investment which will provide the greatest return
The right to select the investment which will provide the greatest return pertains only to variable
universal life insurance.
Variable life insurance
Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's
cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is
this?
Universal Life policy
, Which policy feature makes a universal life policy different from a whole life policy?
A flexible premium schedule
A Modified Endowment Contract (MEC) is best described as
A life insurance contract which accumulates cash values higher than the IRS will allow
A Modified Endowment Contract (MEC) can be described as a life insurance contract that has
accumulated cash values higher than the IRS allows.
Modified Endowment Contract (MEC)
A single premium cash value policy can be described as
a policy that is paid up after only one payment
The least expensive option to pay off a 30-year mortgage balance would be
decreasing term life
What is a corridor in relation to a Universal Life insurance policy?
The corridor is the gap between a Universal Life policy's total death benefit and the policy's cash value.
Which of the following are the premium payments for a Universal life policy NOT used for?
Separate account investments
Which of the following policies does NOT build cash value?
Term life insurance does not build cash value.
A Renewable Term Life insurance policy can be renewed
at a predetermined date or age, regardless of the insured's health
The type of policy which pays on the death of the last person is called
survivorship life
Index whole life insurance contains a securities component that acts as a(n)
hedge against inflation
The premium for a Modified whole life policy is
lower than the typical whole life policy during the first few years and then higher than typical for the
remainder
A life insurance policy that has premiums fully paid up within a stated time period is called
limited payment insurance
