Life & Health Insurance Types of Life Policies Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance Types of Life Policies flashcards as text
Which of the following is a key characteristic of variable universal life (VUL) insurance?
Answer: Flexible premiums with cash value invested in separate account subaccounts
VUL combines the flexible premiums of universal life with the investment subaccount options of variable life, and the policyowner bears the investment risk.
An annuity certain differs from a life annuity in that it:
Answer: Pays benefits for a guaranteed period regardless of whether the annuitant is living
An annuity certain (period certain) pays income for a fixed number of years whether or not the annuitant is alive, eliminating the longevity gamble of a pure life annuity.
A waiver of premium rider on a whole life policy allows the insurer to:
Answer: Keep the policy in force by waiving premiums if the insured becomes totally disabled
The waiver of premium rider continues the policy in full force without requiring premium payments during periods of the insured's total disability, typically after a 6-month elimination period.
Which type of term insurance is most commonly used to cover mortgage obligations?
Answer: Decreasing term
Decreasing term insurance is used for mortgage protection because the death benefit declines in parallel with the reducing outstanding mortgage balance.
A return of premium (ROP) term policy differs from standard term insurance because it:
Answer: Returns all premiums paid if the insured outlives the policy term
An ROP term policy refunds the total premiums paid to the policyowner if the insured is still living at the end of the term, in exchange for higher premiums than standard term.
What is the primary distinction between a participating (par) and a non-participating (non-par) life insurance policy?
Answer: Par policies pay dividends to policyowners; non-par policies do not
Participating policies are eligible to receive dividends (a return of excess premium) declared by the insurer, whereas non-participating policies do not pay dividends.
Which of the following statements about group life insurance is CORRECT?
Answer: Coverage is evidenced by a master contract held by the employer and certificates issued to employees
Group life insurance uses a single master policy issued to the group sponsor (e.g., employer), with individual members receiving certificates summarizing their coverage.