3 Policies

Front 1

1

All of the following are true regarding a decreasing term policy EXCEPT

Back 1

A

It has a lower premium than level term.

B

The contract pays only in the event of death during the term and there is no cash value.

C

The face amount steadily declines throughout the duration of the contract.

D

The payable premium amount steadily declines throughout the duration of the contract.

Front 2

2

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Back 2

A

Juvenilelife

B

Terminsurance

C

Option B

D

Option A

Front 3

3

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Back 3

A

Required a premium increase each renewal.

B

Built cash values.

C

Required proof of insur ability every year.

D

Decreased death benefit at each renewal.

Front 4

4

In a group life insurance policy, the employer may select all of the following EXCEPT

Back 4

A

The amount of insurance.

B

The premiumpayor.

C

The beneficiary.

D

The type of insurance.

Front 5

5

A Straight Life policy has what type of premium?

Back 5

A decreasing annual premium for the life of the insured

B.A variable annual premium for the life of the insured

C.A level annual premium for the life of the insured

D.An increasing annual premium for the life of the insured

Front 6

6

Which is the correct comparison between survivor ship life and a joint life policy?

Back 6

A

A joint life policy has a lower premium than a survivor ship life policy.

B

Joint life policies can cover more than two individuals, while survivo rship life is limited to two.

C

The premium in joint life is based on joint ages, but in survivor ship life it is based on the age of the oldest insured.

D

Joint life pays a death benefit on the first death, while survivor ship life pays on the last death.

Front 7

7

Which entity regulates variable life policies?

Back 7

A

Only the Insurance Department

B

Both State government and the Insurance Department

C

Commissioner of Insurance

D

Only the state government

Front 8

8

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Back 8

A

Limited pay whole life

B

Interest-sensitive whole life

C

Life annuity with period certain

D

Increasing term

Front 9

9

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Back 9

A

Survivor ship Life Policy

B

Second-to-Die

C

Family Income Policy

D

Joint Life Policy

Front 10

10

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Back 10

A

Universal Life – Option B

B

Equity Indexed Universal Life

C

Variable Universal Life

D

Universal Life – Option A

Front 11

11

An insurance policy that only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, matures at the insured's age 100, is called

Back 11

A

Single premium whole life.

B

Minimum deposit whole life.

C

Enhanced whole life.

D

Graded premium whole life.

Front 12

12

An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewa bility and convertibility options. When the insured renews the policy in five years

Back 12

A

The premium will decrease for the new 5 year term since the insured is now a lesser risk to the company.

B

The premium will increase each year during the next 5 year term as the face amount increases each year.

C

The premium will increase because the insured will be 5 years older than when the policy was originally purchased.

D

The premium will remain the same for the new 5 year term.

Front 13

13

Which of the following must an agent receive in order to sell variable life insurance policies?

Back 13

A

Variable products license

B

Certificate of authority

C

SEC registration

D

FINRA registration

Front 14

14

Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?

Back 14

A

Reduced adverse selection

B

Lower persistency

C

Higher premium

D

Higher underwriting costs

Front 15

15

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

Back 15

A

The group has not been established for long enough.

B

The purpose of the group was to purchase life insurance.

C

Their profession poses too high of a risk for the insurer.

D

There are not enough people in the group to qualify for group life insurance.

Front 16

1

All of the following are true regarding a decreasing term policy EXCEPT

Back 16

D

The payable premium amount steadily declines throughout the duration of the.

contract.Incorrect! Premiums remain level with a decreasing term policy; only the face amount decreases.

Front 17

2

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Back 17

D

Option A

Incorrect! Under Option A, the death benefit remains level while the cash value gradually increases. The death benefit will increase at a later date in order to maintain a gap between the cash value and the death benefit before the policy matures.

Front 18

3

A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He discovered that his policy

Back 18

A

Required a premium increase each renewal.

Correct! Annually Renewable Term policies' premiums are adjusted each year to the insured's attained age; however, the policy may be guaranteed renewable. Death benefits remain level, and as with any term policy, there are no cash values.Review Content Next Question

Front 19

4

In a group life insurance policy, the employer may select all of the following EXCEPT

Back 19

C

The beneficiary.

Employees must be allowed to select a beneficiary.

Front 20

5

A Straight Life policy has what type of premium?

Back 20

A level annual premium for the life of the insured

correct! Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit.

Front 21

6

Which is the correct comparison between survivor ship life and a joint life policy?

Back 21

A

Joint life pays a death benefit on the first death, while survivor ship life pays on the last death.

Incorrect! The main difference between joint and survivor ship life policies concerns the payment of the death benefit. Whereas traditional joint life policies pay after the first death, survivor ship life policies pay after the second death. Both types of policies' premiums are determined by a joint age. Because the benefits of a survivor ship life policy are not paid until after the last death, the joint age is considered to be extended, thus lowering the premium.

Front 22

7Which entity regulates variable life policies?

Back 22

B

Both State government and the Insurance Department

correct! Variable life insurance is regulated by both the state and federal governments, as well as the Insurance Department.

Front 23

8

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?

Back 23

A

Limited pay whole life

correct! Premium payments will cease at her age 65, but coverage will continue to her death or age 100.Review Content Next Question

Front 24

9

A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that?

Back 24

D Joint Life Policy

correct! Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first insured, the policy ends.Review Content

Next Question

Front 25

10

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?

Back 25

D

Universal Life – Option A

correct! Universal Life Option A (Level Death Benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.

Front 26

11

An insurance policy that only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, matures at the insured's age 100, is called

Back 26

A

Single premium whole life.

correct! Single premium whole life requires the entire premium to be paid in one lump sum at the policy's inception.

Front 27

12

An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years

Back 27

C

The premium will increase because the insured will be 5 years older than when the policy was originally purchased.

correct! The premium will remain level during the entire level premium term policy period. If the policy renews at the end of the term, the premium will be based on the insured’s attained age at the time of renewal.

Front 28

13

Which of the following must an agent receive in order to sell variable life insurance policies?

Back 28

D

FINRA registration

correct! Agents selling variable life products must be registered with FINRA, and must be licensed within the state to sell life insurance. SEC registration is for securities, not agents.Review Content Next Question

Front 29

14

Which of the following distinguishes a Group Life Policy from an Individual Life Insurance Policy?

Back 29

A

Reduced adverse selection

correct! In order to reduce adverse selection, a Group Life Policy requires a minimum number of participants in the group, depending on who pays the premium.Review Content Next Question

Front 30

15

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

Back 30

B

The purpose of the group was to purchase life insurance.

Correct! In order to qualify for small group life insurance, a group must be formed for a purpose other than attaining life insurance.Review ContentNext Question

Front 31

03/31/2016

Back 31

(3 Policies)