Type of Insurance Policies
questions with complete
solutions.
Which of the following statements about universal life insurance is NOT true? -
Ans>>>Universal life insurance normally has a minimum guaranteed cash value
for duration of the policy
A material change in a modified endowment contract (MEC) results in -
Ans>>>the seven pay test, adjusted for cash value, being applied again
Which statement concerning an adjustable life insurance policy is FALSE? -
Ans>>>Evidence of insurability is required when there is a change in premium
,Under an adjustable life insurance policy, which of the following may NOT be
changed without further underwriting? - Ans>>>The person insured
A nonparticipating whole life insurance policy was surrendered for its $20,000
cash value. The total premiums paid had totaled $16,000. What were the federal
income tax consequences to the policyowner on receipt of the cash value? -
Ans>>>$16,000 was received tax-free and $4,000 as ordinary income
Which of the following would NOT be a reason for purchasing life insurance on a
child's life? - Ans>>>Provide benefits for the child if the parents die
All of these statements concerning group credit life insurance are false EXCEPT -
Ans>>>The face amount is determined by the outstanding loan balance
How long does protection normally extend to under a limited pay whole life
policy? - Ans>>>Until age 100
What kind of life insurance policy allows a policyowner the choice of investments
along with flexible premium payments? - Ans>>>Variable universal life
, The insurance coverage in a variable life insurance policy may vary based on the
value of - Ans>>>its underlying investments
What kind of life policy typically offers mortgage protection? - Ans>>>Decreasing
term
Laura added a children's rider to her life insurance policy. What type of coverage
was added? - Ans>>>Level term
How does the cost for a survivorship life policy compare to the cost of combining
two separate life insurance policies? - Ans>>>Survivorship life policy is lower
Which is an accurate description of the premium in a graded premium life
insurance policy? - Ans>>>Annual increases in premium for a stated number of
years then levels off for the remainder of the contract
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? - Ans>>>Less than the policy's face amount
questions with complete
solutions.
Which of the following statements about universal life insurance is NOT true? -
Ans>>>Universal life insurance normally has a minimum guaranteed cash value
for duration of the policy
A material change in a modified endowment contract (MEC) results in -
Ans>>>the seven pay test, adjusted for cash value, being applied again
Which statement concerning an adjustable life insurance policy is FALSE? -
Ans>>>Evidence of insurability is required when there is a change in premium
,Under an adjustable life insurance policy, which of the following may NOT be
changed without further underwriting? - Ans>>>The person insured
A nonparticipating whole life insurance policy was surrendered for its $20,000
cash value. The total premiums paid had totaled $16,000. What were the federal
income tax consequences to the policyowner on receipt of the cash value? -
Ans>>>$16,000 was received tax-free and $4,000 as ordinary income
Which of the following would NOT be a reason for purchasing life insurance on a
child's life? - Ans>>>Provide benefits for the child if the parents die
All of these statements concerning group credit life insurance are false EXCEPT -
Ans>>>The face amount is determined by the outstanding loan balance
How long does protection normally extend to under a limited pay whole life
policy? - Ans>>>Until age 100
What kind of life insurance policy allows a policyowner the choice of investments
along with flexible premium payments? - Ans>>>Variable universal life
, The insurance coverage in a variable life insurance policy may vary based on the
value of - Ans>>>its underlying investments
What kind of life policy typically offers mortgage protection? - Ans>>>Decreasing
term
Laura added a children's rider to her life insurance policy. What type of coverage
was added? - Ans>>>Level term
How does the cost for a survivorship life policy compare to the cost of combining
two separate life insurance policies? - Ans>>>Survivorship life policy is lower
Which is an accurate description of the premium in a graded premium life
insurance policy? - Ans>>>Annual increases in premium for a stated number of
years then levels off for the remainder of the contract
What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old? - Ans>>>Less than the policy's face amount
