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5 Cards in this Set
- Front
- Back
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3. Which of the following types of insurance is often sold by mortgage lenders to provide the funds necessary to pay off a 10-year mortgage loan if the insured dies?
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(A) decreasing term
The answer is (A). (B) is incorrect because the amount of insurance under an increasing term policy increases while the amount needed to pay off the mortgage decreases. (C) is incorrect because the amount of insurance under a modified whole life policy remains constant while the amount needed to pay off the mortgage decreases. (D) is incorrect because the amount of insurance under a 10-year renewable term policy remains constant for 10 years while the amount needed to pay off the mortgage decreases. |
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35. Which of the following types of life insurance allows the policyowner to increase or decrease premium payments to virtually any amount desired as long as there is sufficient cash value to cover mortality costs and expenses?
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C) universal life insurance
The answer is (C). (A), (B), and (D) are incorrect because current assumption whole life, variable life, and ordinary life have fixed premiums. Truly flexible premiums are a distinctive feature of universal life insurance |
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79. The cash value in a life insurance policy has all the following characteristics EXCEPT
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(D) It increases the insurer's net amount at risk.
The answer is (D). The cash value decreases the insurer's net amount at risk. |
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91. All the following statements concerning joint-life insurance are correct EXCEPT:
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(B) A second-to-die policy must be a term insurance contract.
The answer is (B). Joint-life policies are usually some form of cash value insurance. |
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96. All the following statements concerning variable life insurance are correct EXCEPT
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(B) Variable life policies provide guarantees of both the interest rate and a minimum cash value.
The answer is (B). Variable life policies provide no guarantee of either interest rate or minimum cash value. |
