Which of the following statements is correct regarding Adjustable Life?
answer
Evidence of insurability may be required when insurance is increased.
question
Which Universal Life option has a gradually increasing cash value and a level death benefit?
answer
Option A
question
Equity indexed annuities
answer
Seek higher returns.
question
Which life policy is designed to provide the policyowner a hedge against the effects of inflation?
answer
Variable life
question
Which of the following is true regarding the annuity period?
answer
It may last for the lifetime of the annuitant
question
All other factors being equal, the least expensive first-year premium payment is found in
answer
Annually Renewable Term.
question
Periodic payments of accumulated funds best describes
answer
An annuity
question
All of the following are characteristics of a Universal Life policy EXCEPT
answer
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.
question
All other factors being equal, the least expensive first-year premium payment is found in
answer
Annually Renewable Term.
question
Which statement is NOT true regarding a Straight Life policy?
answer
Its premium steadily decreases over time, in response to its growing cash value.
question
Which Universal Life option has a gradually increasing cash value and a level death benefit?
answer
Option A
question
Which of the following best defines target premium in a universal life policy?
answer
BThe recommended amount to keep the policy in force throughout its lifetime
question
The corridor in a Universal Life Insurance policy raises the death benefit to avoid
answer
Tax advantages
question
Equity indexed annuities
answer
Seek higher returns
question
All of the following are true regarding the convertibility option under a term life insurance policy EXCEPT
answer
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
question
Which of the following is NOT true regarding Equity Indexed Annuities?
answer
AThey earn lower interest rates than fixed annuities.
question
Which life policy is designed to provide the policyowner a hedge against the effects of inflation?
answer
variable life
question
All of the following are true regarding the convertibility option under a term life insurance policy EXCEPT
answer
BUpon conversion, the death benefit of the permanent policy will be reduced by 50%.
question
All of the following are characteristics of a Universal Life policy EXCEPT
answer
AThe planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.
question
What is the purpose of a fixed period settlement option?
answer
To provide a guaranteed income for a certain amount of time
question
The rider that allows the company to forgo collecting the premium if the insured is disabled is called
answer
Waiver of premium.
question
What is true about nonforfeiture values?
answer
They are required by state law
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Which is NOT true about beneficiary designations?
answer
The beneficiary must have insurable interest in the insured.
question
Which of the following policy components contains the company's promise to pay?
answer
Insuring clause
question
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
answer
Universal life
question
What type of insurance would be used for a Return of Premium rider?
answer
Increasing term
question
All of the following are true regarding insurance policy loans EXCEPT
answer
DPolicy loan can be made on policies that do not accumulate cash value.
question
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
answer
Other insured rider
question
An insured is involved in a car accident that damages his cervical vertebrae and surrounding nerves. As a result, the insured become quadriplegic. If the policy contains a Waiver of Premium rider, which of the following statements is true regarding the policy premiums?
answer
6 months
question
What document must be made part of the insurance policy entire contract?
answer
Original application
question
Lyle has a $10,000 term life policy. He paid his annual premium on February 1. Lyle fails to renew the policy and dies on February 28 of the following year. Accounting for the $200 of earned premium, how much will the beneficiary receive from Lyle's insurance company?
answer
9800
question
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
answer
Family term
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