Life & Health Insurance Exam Life & Health Insurance Types of Life Policies 4

Question 1

Which of the following statements about a straight life (ordinary whole life) policy is CORRECT?

Accepted Answer

The policy matures when the cash value equals the face amount at age 100 (or 121 under newer tables)

Answer

Under traditional whole life policies, the cash value grows until it equals the face amount at the policy's maturity age (historically 100, now often 121 under the 2001 CSO table).

Question 2

An agent explains that a policy's death benefit will equal the face amount plus the accumulated cash value at death. This describes a:

Accepted Answer

Universal life policy with increasing death benefit option

Answer

Universal life Option B (increasing death benefit) pays the face amount plus the policy's accumulated cash value, so the total death benefit grows over time.

Question 3

Family income policy combines which two types of coverage?

Accepted Answer

Whole life and decreasing term

Answer

A family income policy combines a whole life base policy with decreasing term insurance to provide monthly income for a specified period if the insured dies early.

Question 4

What distinguishes a family maintenance policy from a family income policy?

Accepted Answer

The family maintenance policy uses level term insurance, providing income for a full fixed period from the date of death

Answer

A family maintenance policy uses level (not decreasing) term, so if the insured dies at any point during the term, the full income period (e.g., 20 years) begins from the date of death.

Question 5

Juvenile life insurance written with a 'payor benefit' rider ensures that:

Accepted Answer

Premiums are waived if the adult payor dies or becomes totally disabled before the child reaches a specified age

Answer

The payor benefit rider waives future premiums on a juvenile policy if the adult payor (usually a parent) dies or becomes totally disabled before the insured child reaches the policy's specified age.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life & Health Insurance Types of Life Policies 4