Nevada Life & Health Insurance Exam Questions and Answers 100% Pass

Nevada Life & Health Insurance Exam Questions and Answers 100% Pass term insurance - Answer- temporary protection because it only provides coverage for a specific period of time face amount - Answer- death benefit 3 basic types of term coverage - Answer- level, increasing, decreasing - based on how the face amount changes during the policy term What is the premium in term insurance? - Answer- regardless of type of term insurance purchased, premium is level throughout the term of policy level term insurance - Answer- death benefit does not change throughout the life of the policy annually renewable term - Answer- premium increases annually according to the attained age, guaranteed to be renewable each year decreasing term - Answer- level premium and death benefit that decreases each year over duration of the policy term increasing term - Answer- level premium and death benefit that increases each year over the duration of the policy term return of premium life insurance - Answer- an increasing term policy that pays an additional death beneficiary equal to the amount of the premiums paid - return of premium is paid if the death occurs within a specified period of time or if the insured outlives the policy term renewable provision - Answer- allows the policyowner the right to renew coverage at the expiration date without evidence of insurability convertible provision - Answer- provides the policyowner the right to convert the policy to a permanent insurance policy without evidence of insurability permanent life insurance - Answer- general term used to refer to various forms of life insurance policies that build cash value and remain in effect for the entire life of the insured (or until age 100) as long as premium is paid nonforteiture value - Answer- aka cash value, does not usually accumulate until the third policy year and it grows tax deferred key characteristics of whole life insurance - Answer- - level premium - death benefit - cash value - living benefits 3 basic forms of whole life insurance - Answer- 1. straight (ordinary) whole life 2. limited-pay whole life 3. single premium whole life straight life - Answer- basic whole life policy; policy owner pays the premium from the lime the policy is issued until insured's death or age 100 - has lowest annual premium limited-pay whole life - Answer- designed so that premiums for coverage will be completely paid-up well before age 100 - cash value builds up faster single premium whole life - Answer- designed to provide a level death benefit to the insured's age 100 for a one-time, lump-sum payment - generate immediate cash value adjustable life - Answer- can assume the form of either term insurance or permanent insurance; insured typically determines how much coverage is needed and the affordable amount of premium adjustable life cash value - Answer- only develops when the premiums paid are more than the cost of the policy universal life (flexible premium adjustable life) - Answer- policyowner has the flexibility to increase/decrease amount of premium paid into policy; policyowner may skip paying a premium and policy will not lapse as long as there is sufficient cash value at the time to cover monthly deductions for cost of insurance universal life premium types - Answer- 1. minimum premium: amount needed to keep policy in force for year 2. target premium: recommended amount to keep policy in force for lifetime 2 death benefit options for universal life - Answer- 1. Option A 2. Option B Option A (Level Death Benefit option) - Answer- death benefit remains level while cash value gradually increases, lowing the "pure insurance" with insurer in later years - death benefit increases near the end in order to maintain gap between cash value and death benefit in life insurance policy Option B (Increasing Death Benefit option) - Answer- death benefit includes annual increase in cash value so that death benefit gradually increases each year