Iowa Life Insurance: Final exam
Questions and Verified Answers, 100-
Score Guarantee Pass (Latest 2025)
Group Life Insurance - CORRECT ANSWERS life insurance that provides a master policy
for a group; each eligible group member receives a certificate of insurance
Individual Life Insurance - CORRECT ANSWERS purchased by individuals; usually greater
face value
Permanent Life vs. Term Life - CORRECT ANSWERS Perm Life: whole life insurance that
is effective for the entire life of the insured up to age 100.
Term Life: insurance that is effective for a temporary time period, designated by the policy.
Participating Life vs. Nonparticipating Life - CORRECT ANSWERS Participating Life:
policies that pay dividends to the policy holders.
Nonparticipating Life: policies that pay dividends to shareholders.
Fixed Life vs. Variable Life - CORRECT ANSWERS Fixed Life: policies earn a constant rate
of interest, providing guaranteed minimum of benefits.
Variable Life: policies earn a fluctuating rate of interest & don't guarantee a certain cash value.
Ordinary (Straight) Life - CORRECT ANSWERS basic whole life insurance with a level face
amount, & level premiums payable over the insured's entire life.
Limited Payment (LP) Whole Life Policies - CORRECT ANSWERS the insured is covered
for their entire life, but premiums are pad for a limited time.
Single Premium Whole Life Policies - CORRECT ANSWERS allows the insured to pay the
entire premium in one lump-sum, & have coverage for the insured's entire life.
Adjustable Life - CORRECT ANSWERS a mix of whole & term life insurance.
Changes that can be made to the policy:
- raise/lower premium
-raise/lower the face amount
-change the coverage period
- change the premium-paying period
Universal Life Insurance - CORRECT ANSWERS permanent cash-value insurance that
combines term insurance (death benefits) with a tax-sheltered savings/investment account that pays
interest, usually at competitive money market rates
Variable Whole Life - CORRECT ANSWERS has fixed premiums & a guaranteed minimum
death benefit just like OWL, but differs b/c it offers higher interest rates defending the policyowner
against inflation
, Variable Universal Life - CORRECT ANSWERS product that blends many features of
whole life, universal life, and variable life. Key features are premium flexibility, cash value investment
control, and death benefit flexibility.
Interest Sensitive Whole Life - CORRECT ANSWERS Premiums vary to reflect the
insurer's changing assumptions with regard to death investment and expense factors.
Equity-Indexed Universal Life - CORRECT ANSWERS Equity-indexed universal life works
the same way as universal life insurance except the interest rate is tied to a stock market index.
Term Life Insurance - CORRECT ANSWERS Insurance that provides financial protection
from losses resulting from a death during a definite period, or term.
Level Term - CORRECT ANSWERS premiums and death benefits stay the same for the
life of the policy
Decreasing Term - CORRECT ANSWERS A type of life insurance that features a level
premium and a death benefit that decreases each year over the duration of the policy.
Return of Premium - CORRECT ANSWERS The longer the term, the lower the premiums;
premiums are returned to the insured if no death benefit has been paid & are not taxable.
Annually Renewable Term - CORRECT ANSWERS -Renews each year without proof of
insurability
-Premiums increase due to attained age
Increasing Term - CORRECT ANSWERS provides an increasing face amount over time
based on specific amounts or a percentage of the original face amount.
Special Features - CORRECT ANSWERS Renewable Term: Policies that allow the
policyowner to renew the term policy after the designated term expires w/o having to prove insurability.
Convertible Term: Policies that allow policyowners to convert their term insurance into permanent
policies w/o showing proof of insurability.
Single Premium Immediate Annuity (SPIA) - CORRECT ANSWERS A lump-sum payment is
made w/ the insurer & payments to the annuitant start immediately,
Single Premium Deferred Annuity (SPDA) - CORRECT ANSWERS A deferred annuity
purchase with a lump sum
Flexible Premium Deferred Annuity - CORRECT ANSWERS The annuity purchased with
multiple payments, whose benefit is paid more than one year after the purchase.
Fixed Annuities - CORRECT ANSWERS have a guaranteed minimum interest rate at
which the premium payments accrue interest during the accumulation phase & a fixed interest rate at
which level annuity payments are paid during the annuity phase.
Questions and Verified Answers, 100-
Score Guarantee Pass (Latest 2025)
Group Life Insurance - CORRECT ANSWERS life insurance that provides a master policy
for a group; each eligible group member receives a certificate of insurance
Individual Life Insurance - CORRECT ANSWERS purchased by individuals; usually greater
face value
Permanent Life vs. Term Life - CORRECT ANSWERS Perm Life: whole life insurance that
is effective for the entire life of the insured up to age 100.
Term Life: insurance that is effective for a temporary time period, designated by the policy.
Participating Life vs. Nonparticipating Life - CORRECT ANSWERS Participating Life:
policies that pay dividends to the policy holders.
Nonparticipating Life: policies that pay dividends to shareholders.
Fixed Life vs. Variable Life - CORRECT ANSWERS Fixed Life: policies earn a constant rate
of interest, providing guaranteed minimum of benefits.
Variable Life: policies earn a fluctuating rate of interest & don't guarantee a certain cash value.
Ordinary (Straight) Life - CORRECT ANSWERS basic whole life insurance with a level face
amount, & level premiums payable over the insured's entire life.
Limited Payment (LP) Whole Life Policies - CORRECT ANSWERS the insured is covered
for their entire life, but premiums are pad for a limited time.
Single Premium Whole Life Policies - CORRECT ANSWERS allows the insured to pay the
entire premium in one lump-sum, & have coverage for the insured's entire life.
Adjustable Life - CORRECT ANSWERS a mix of whole & term life insurance.
Changes that can be made to the policy:
- raise/lower premium
-raise/lower the face amount
-change the coverage period
- change the premium-paying period
Universal Life Insurance - CORRECT ANSWERS permanent cash-value insurance that
combines term insurance (death benefits) with a tax-sheltered savings/investment account that pays
interest, usually at competitive money market rates
Variable Whole Life - CORRECT ANSWERS has fixed premiums & a guaranteed minimum
death benefit just like OWL, but differs b/c it offers higher interest rates defending the policyowner
against inflation
, Variable Universal Life - CORRECT ANSWERS product that blends many features of
whole life, universal life, and variable life. Key features are premium flexibility, cash value investment
control, and death benefit flexibility.
Interest Sensitive Whole Life - CORRECT ANSWERS Premiums vary to reflect the
insurer's changing assumptions with regard to death investment and expense factors.
Equity-Indexed Universal Life - CORRECT ANSWERS Equity-indexed universal life works
the same way as universal life insurance except the interest rate is tied to a stock market index.
Term Life Insurance - CORRECT ANSWERS Insurance that provides financial protection
from losses resulting from a death during a definite period, or term.
Level Term - CORRECT ANSWERS premiums and death benefits stay the same for the
life of the policy
Decreasing Term - CORRECT ANSWERS A type of life insurance that features a level
premium and a death benefit that decreases each year over the duration of the policy.
Return of Premium - CORRECT ANSWERS The longer the term, the lower the premiums;
premiums are returned to the insured if no death benefit has been paid & are not taxable.
Annually Renewable Term - CORRECT ANSWERS -Renews each year without proof of
insurability
-Premiums increase due to attained age
Increasing Term - CORRECT ANSWERS provides an increasing face amount over time
based on specific amounts or a percentage of the original face amount.
Special Features - CORRECT ANSWERS Renewable Term: Policies that allow the
policyowner to renew the term policy after the designated term expires w/o having to prove insurability.
Convertible Term: Policies that allow policyowners to convert their term insurance into permanent
policies w/o showing proof of insurability.
Single Premium Immediate Annuity (SPIA) - CORRECT ANSWERS A lump-sum payment is
made w/ the insurer & payments to the annuitant start immediately,
Single Premium Deferred Annuity (SPDA) - CORRECT ANSWERS A deferred annuity
purchase with a lump sum
Flexible Premium Deferred Annuity - CORRECT ANSWERS The annuity purchased with
multiple payments, whose benefit is paid more than one year after the purchase.
Fixed Annuities - CORRECT ANSWERS have a guaranteed minimum interest rate at
which the premium payments accrue interest during the accumulation phase & a fixed interest rate at
which level annuity payments are paid during the annuity phase.
