EXAMFX Life Insurance Policy Types 2

Question 1

Which type of life insurance policy combines a savings component with permanent death benefit protection?

Accepted Answer

Whole life

Answer

Term life

Answer

Decreasing term

Answer

Group term

Question 2

A universal life insurance policy's flexible premium feature allows the policyowner to do which of the following?

Accepted Answer

Vary premium amounts within policy limits

Answer

Change the insured at any time

Answer

Increase the death benefit without evidence of insurability

Answer

Convert to term insurance at any age

Question 3

What distinguishes variable life insurance from whole life insurance?

Accepted Answer

Variable life cash value is invested in separate accounts

Answer

Variable life has no cash value

Answer

Variable life premiums are flexible

Answer

Variable life has a shorter coverage period

Question 4

An indexed universal life (IUL) policy credits interest based on which of the following?

Accepted Answer

Performance of a stock market index

Answer

A fixed rate set at policy issue

Answer

The policyowner's investment choices

Answer

The insurer's general account returns

Question 5

A 20-pay whole life policy differs from a straight whole life policy in that the:

Accepted Answer

Premiums are paid over 20 years instead of for life

Answer

Death benefit ends at age 65

Answer

Coverage terminates after 20 years

Answer

Cash value does not accumulate

Question 6

Which policy type is most appropriate for an individual who wants permanent coverage with the lowest initial premium outlay?

Accepted Answer

Whole life (straight life)

Answer

20-pay whole life

Answer

Variable universal life

Answer

Endowment policy

Question 7

A survivorship life (second-to-die) policy pays the death benefit when:

Accepted Answer

The last surviving insured dies

Answer

The first insured dies

Answer

Either insured becomes disabled

Answer

Both insureds reach age 65