NC LIFE insurance state exam Questions And Answers Verified 100% Correct

NC LIFE insurance state exam Questions And Answers Verified 100% Correct Adjustable life - ANSWER can assume the form of either term insurance or permanent insurance; as the needs change the policy holder can increase/decrease the premium or premium paying period; increase/decrease the face amount/ or change the period of protection. The policy holder can also convert from term to whole life. Some changes can require proof of insurability MODIFIED - ANSWER Whole life policy that charges a lower premium in the first few policy years, usually 3 to 5 years, and then a higher level premium for the remainder of the insured's life GRADED - ANSWER Similar to modified in that premiums start out relatively low and then level off at a point in the future. Starts with a premium that is approximately 50% lower than the premium of a straight life policy and then it will gradually increase each year for a period of usually 5-10 years and then remain level thereafter INDETERMINATE (NONGUARANTEED): - ANSWER premiums that may vary from year to year DOUBLE OR TRIPLE (MULTIPLE) PROTECTION - ANSWER Multiple protection policies combine permanent insurance with level term insurance for the multiple protection period. These policies pay double or triple the face amount if the insured dies during the specified period, which is usually determined as a number of years (such as 10 or 20) or to a specified age (such as to age 65). If the insured dies after the specified period, the policy only pays the face amount. TERM RIDERS - ANSWER allow for an additional amount of temporary insurance to be provided on the insured, without the need to issue another policy. They are usually attached to whole life policy to provide greater protection at a reduced cost. FAMILY POLICY/RIDERS - ANSWER combines whole life a term insurance to cover family members in a single policy, providing coverage on every member of a family. The family policy typically provides whole life on the breadwinner of the family and convertible term insurance on the other family members FAMILY INCOME - ANSWER a combination of decreasing term insurance and whole life insurance on the breadwinner of the family. The policy is designed to provide an income period which begins from the effective date of the policy and commonly runs for twenty years FAMILY MAINTENANCE - ANSWER life insurance based on a family income policy which combines whole life with level term insurance to provide a beneficiary with income over a specified period of time (15 or 20 years) if the insured dies during that period of time. If the insured dies within that period of time, the level term insurance is sufficient to pay the monthly income portion of the contract JOINT LIFE - ANSWER a single policy that is designed to insure two or more lives; policies can be in the form of term insurance or permanent insurance. Premium would be less than for the same type and amount of coverage on the same individuals. The premium is based on a joint average age that is between the ages of the insureds; the death benefit is paid upon the first death only. Also used to insure the lives of business partners in the funding of a buy-sell agreement. LAST SURVIVOR/SURVIVORSHIP LIFE - ANSWER (Second to Die) much the same as joint life in that it insures two or more lives for a premium that is based on a joint age. The major difference is that survivorship life pays on the last death rather than upon the first death Juvenile - ANSWER any life insurance written on the life of a minor LIMITED BENEFIT - ANSWER These policies cover certain expenses from specifically named illnesses, injuries, or circumstances. Cancer policies pay benefits for the actually treatment of cancer and cover no other illness. Flexible Premium Adjustable Life - ANSWER The policy owner has the flexibility to increase the amount of premium paid into the policy and to later decrease it again. The policy owner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to cover the monthly deductions for cost of insurance. If the cash value is too small, the policy will expire. TARGET PREMIUM - ANSWER 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 UNBUNDLED - ANSWER all the pricing elements are disclosed separately by the insurer, unlike traditional term or whole life insurance in which the policy owner is charged a single gross-premium amount Option A Level death benefit options - ANSWER the death benefits remain level while the cash value gradually increases, thereby lowering the pure insurance with the insurer in the later years Option B: Increasing death benefit option - ANSWER the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point the total death benefit will always be equal to the face amount of the policy plus the current amount of cash values. INTEREST SENSITIVE WHOLE LIFE (CURRENT ASSUMPTION LIFE): - ANSWER although the insurer guarantees a contract interest rate (usually 3 to 6%), there is also a potential for the policy owner to get a current interest rate, which is not guaranteed in the contract but may be higher because of current market conditions. SINGLE PREMIUM - ANSWER one time lump sum payment INSTALLMENT PREMIUM: FIXED/FLEXIBLE/PERIODIC - ANSWER paid in installments over a period of time FIXED - ANSWER the annuitant knows the exact amount of each payment received from the annuity during the annuity period VARIED - ANSWER serves as a hedge against inflation and is variable from the standpoint that the annuitant may receive different rates of return on the funds that are paid into the annuity EQUITY INDEX - ANSWER fixed annuities that invest on a relatively aggressive basis to aim for higher returns. ANNUITY WITH PERIOD CERTAIN - ANSWER short term annuities that limit the amount paid to a certain fixed period or until a certain fixed amount it liquidated INSURING AGREEMENT/CLAUSE - ANSWER sets for the basic agreement between the insurer and the insured. It states that the insurer's promise to pay the death benefit upon the insured's death. OWNERSHIP CLAUSE - ANSWER the policy owner has the responsibility of paying the policy premiums, and is also the person who must have an insurable interest in the insured at the time of application for the insurance ENTIRE CONTRACT CLAUSE - ANSWER provision that stipulates that the policy and a copy of the application along with any riders or amendments, constitute the entire contract GRACE PERIOD - ANSWER the period of time after the premium due date that the policy owner has to pay the premium before the policy lapses