1
Types of Life Insurance Policies/ Questions &
Definitions.2025 latest update GUARANTEED PASS
Andrea bought a $300,000 term-to-age-55 policy. All the following statements
about her policy are correct EXCEPT:
a. The policy will generate a cash value that is payable at age 55.
b. It is possible that Andrea could convert the term policy to a life insurance policy
that provides coverage for Andrea's entire life even if she becomes uninsurable.
c. The premium for the policy stays the same until the policy expires.
d. The policy provides $300,000 of coverage until Andrea reaches age 55. -
(ANSWER)a. The policy will generate a cash value that is payable at age 55.
If the policy includes the convertibility feature, Andrea could convert the policy to
a permanent life policy provided she does so before the term policy expires.
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower
than straight whole life rates and increases each year for the first ten years of the
policy period. After that, the premium levels off and stays at that amount for the
life of the policy. What type of policy does Jessica own?
a. single premium whole life
b. modified premium whole life
c. 10-pay whole life
d. graded premium whole life - (ANSWER)d. graded premium whole life
10-pay whole life is a form of limited premium life insurance in which all
premiums will cease (not increase) ten years after he policy is issued.
, 2
Which one of the following statements about variable life insurance is correct?
a. The cash value is not guaranteed with variable life.
b. Variable life's premiums are only invested in safe, conservative investments.
c. Variable life policyowners cannot choose how their contract premiums are
invested.
d. There is no guaranteed death benefit with variable life. - (ANSWER)a. The cash
value is not guaranteed with variable life.
Variable life insurance policyowners can choose how their premiums are invested.
In contrast, traditional whole life insurance policyowners cannot choose how the
insurer invests their contract premiums or values. Instead, the insurer invests the
premiums in safe, secure, and conservative investments.
Variable life insurance policies offer all of the following EXCEPT:
a. a guaranteed death benefit
b. a cash value
c. flexible premium payments
d. a variety of investment subaccount choices - (ANSWER)c. flexible premium
payments
A variable life insurance policy guarantees a minimum death benefit. If the funds
in which the policy is invested perform well, those funds will increase the policy's
cash value, which in turn boosts the death benefit.
Types of Life Insurance Policies/ Questions &
Definitions.2025 latest update GUARANTEED PASS
Andrea bought a $300,000 term-to-age-55 policy. All the following statements
about her policy are correct EXCEPT:
a. The policy will generate a cash value that is payable at age 55.
b. It is possible that Andrea could convert the term policy to a life insurance policy
that provides coverage for Andrea's entire life even if she becomes uninsurable.
c. The premium for the policy stays the same until the policy expires.
d. The policy provides $300,000 of coverage until Andrea reaches age 55. -
(ANSWER)a. The policy will generate a cash value that is payable at age 55.
If the policy includes the convertibility feature, Andrea could convert the policy to
a permanent life policy provided she does so before the term policy expires.
Jessica, age 25, buys a $100,000 life insurance policy. The initial premium is lower
than straight whole life rates and increases each year for the first ten years of the
policy period. After that, the premium levels off and stays at that amount for the
life of the policy. What type of policy does Jessica own?
a. single premium whole life
b. modified premium whole life
c. 10-pay whole life
d. graded premium whole life - (ANSWER)d. graded premium whole life
10-pay whole life is a form of limited premium life insurance in which all
premiums will cease (not increase) ten years after he policy is issued.
, 2
Which one of the following statements about variable life insurance is correct?
a. The cash value is not guaranteed with variable life.
b. Variable life's premiums are only invested in safe, conservative investments.
c. Variable life policyowners cannot choose how their contract premiums are
invested.
d. There is no guaranteed death benefit with variable life. - (ANSWER)a. The cash
value is not guaranteed with variable life.
Variable life insurance policyowners can choose how their premiums are invested.
In contrast, traditional whole life insurance policyowners cannot choose how the
insurer invests their contract premiums or values. Instead, the insurer invests the
premiums in safe, secure, and conservative investments.
Variable life insurance policies offer all of the following EXCEPT:
a. a guaranteed death benefit
b. a cash value
c. flexible premium payments
d. a variety of investment subaccount choices - (ANSWER)c. flexible premium
payments
A variable life insurance policy guarantees a minimum death benefit. If the funds
in which the policy is invested perform well, those funds will increase the policy's
cash value, which in turn boosts the death benefit.
