NC life and health insurance study questions and answers

NC life and health insurance study questions and answers Which of the following is NOT a characteristic of universal life insurance? A Flexible death benefit B Cash account C Fixed premium D Unbundled premium - Answer- C Universal life policies allow the policy owner to increase the amount of premium going into the policy and to later decrease it again. They may even skip a premium payment. The rest of the features apply to universal life policies. Which of the following would help prevent a universal life policy from lapsing? A Corridor of insurance B Target premium C Face amount D Adjustable premium - Answer- B The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime. A 20-year family income policy was purchased effective April 1, 2001. The insured died four months later, on August 1, 2001. The beneficiary receives monthly income for A10 years. B19 years and 8 months. C9 years and 8 months. D20 years. - Answer- B Monthly benefits paid for the remainder of the 20 year benefit period. When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy? AThey can convert their coverage to permanent life insurance with evidence of insurability. BFamily members are not provided any rights. CThey can surrender the coverage for its cash value. DThey can convert their coverage to permanent life insurance without evidence of insurability. - Answer- D Family members may convert their term coverage to permanent insurance if requested within the time stated in the policy. Which of the following types of insurance policies would provide the greatest amount of protection for a temporary period during which an insured will have limited financial resources? AVariable life BTerm CWhole Life DAnnuity - Answer- B Term insurance provides a death benefit only; cost per $1,000 of coverage is less than other types of policies that create cash values. Review Content A Universal Life insurance policy has two types of interest rate that are called AFixed and Variable BMinimum and Target CGuaranteed and Current DOption A and Option B - Answer- C The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs the cash value with a contract (lower guaranteed) rate of interest. What are the two components of a universal policy? AInsurance and investments BMortality cost and interest CSeparate account and policy loans DInsurance and cash account - Answer- D A universal policy has two components: an insurance component and a cash account. The insurance component of a universal life policy is always annual renewable term insurance. The cash account accumulates on a tax deferred basis each year and earns either the guaranteed contract rate or the current rate, whichever is higher. What is the purpose of establishing the target premium for a universal life policy? ATo pay up the policy faster BTo cover all policy expenses CTo keep the policy in force DTo accumulate cash value faster - Answer- C The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime. Which of the following is an example of a limited-pay life policy? ALevel Term Life BStraight Life CLife Paid-up at Age 65 DRenewable Term to Age 70 - Answer- C Limited Pay Whole Life premiums are all paid by the time th