CFP 512 - MODULE 3 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED GRADED A++
Term life insurance
Renewable term policies generally have a guaranteed maximum premium and are
renewable for a specified period of time
reentry term policies
permit the insured to be underwritten every 5 years or so.
decreasing term insurance
form of term life insurance in which the premium remains level but the amount of death
benefit decreases.
whole life insurance
provides a guaranteed death benefit for the life of the insured and requires premium
payments to be made until death or policy maturity
nonforfeiture values
provides a benefit payable to the policyowner if they discontinue premiums before the
death of the insured.
Variable life (VL)
Designed to combine the protection and savings functions of traditional life insurance
with the growth potential of mutual-fund type investments
Prospectus
, a document which includes all the information usually found in a mutual fund prospectus
(including the charges for fund management and administration), must be used when
selling VL products.
Single Premium Whole Life
a policy in which a lump sum payment is made and no further premiums are required.
Modified Whole Life
a whole life policy preceded by a period of term insurance.
Graded Premium Life
designed to each people into a whole life premium. Its premium is fairly low the first
year, then, it increases each year for five to seven years, at which time its reaches its
final premium and remains level for the life of the insured.
Endowment Policy
one in which the death benefit and cash surrender value are equal at a specified date.
Universal Life
gives policyowners the ability to adjust premium, death benefit, and cash value to meet
their financial goals.
Variable Universal Life
is built on a UL platform, unbundled. Marries the flexibility of UL with the investment
selection aspect of VL.
Equity Indexed Universal Life (indexed universal life)
another form of fixed permanent life insurance. Provide for a minimum fixed interest
rate, but also allow policyowners to use an index option to potentially earn better returns
than the guaranteed rate.
COMPLETE SOLUTIONS VERIFIED GRADED A++
Term life insurance
Renewable term policies generally have a guaranteed maximum premium and are
renewable for a specified period of time
reentry term policies
permit the insured to be underwritten every 5 years or so.
decreasing term insurance
form of term life insurance in which the premium remains level but the amount of death
benefit decreases.
whole life insurance
provides a guaranteed death benefit for the life of the insured and requires premium
payments to be made until death or policy maturity
nonforfeiture values
provides a benefit payable to the policyowner if they discontinue premiums before the
death of the insured.
Variable life (VL)
Designed to combine the protection and savings functions of traditional life insurance
with the growth potential of mutual-fund type investments
Prospectus
, a document which includes all the information usually found in a mutual fund prospectus
(including the charges for fund management and administration), must be used when
selling VL products.
Single Premium Whole Life
a policy in which a lump sum payment is made and no further premiums are required.
Modified Whole Life
a whole life policy preceded by a period of term insurance.
Graded Premium Life
designed to each people into a whole life premium. Its premium is fairly low the first
year, then, it increases each year for five to seven years, at which time its reaches its
final premium and remains level for the life of the insured.
Endowment Policy
one in which the death benefit and cash surrender value are equal at a specified date.
Universal Life
gives policyowners the ability to adjust premium, death benefit, and cash value to meet
their financial goals.
Variable Universal Life
is built on a UL platform, unbundled. Marries the flexibility of UL with the investment
selection aspect of VL.
Equity Indexed Universal Life (indexed universal life)
another form of fixed permanent life insurance. Provide for a minimum fixed interest
rate, but also allow policyowners to use an index option to potentially earn better returns
than the guaranteed rate.
