Insurance Product Types Flashcards

Which type of permanent life insurance policy has a cash value that grows based on the performance of investment sub-accounts chosen by the policyholder?

Answer: Variable life insurance

Variable life insurance links cash value growth to investment sub-accounts, so performance depends on market results chosen by the policyholder.

A client wants a life insurance policy that offers flexible premiums and adjustable death benefits. Which product best fits this need?

Answer: Universal life policy

Universal life insurance provides flexibility to adjust both the premium payments and the death benefit within policy limits.

An endowment policy differs from whole life insurance primarily because it:

Answer: Pays the face amount if the insured survives to a specified date

An endowment policy matures and pays the face amount to the living insured at a specified date, unlike whole life which pays only at death.

Which annuity type guarantees a fixed interest rate for the accumulation period and provides a predictable income stream?

Answer: Fixed annuity

A fixed annuity credits a guaranteed interest rate during accumulation and converts to a predictable, fixed income stream at payout.

A joint and survivor annuity primarily benefits:

Answer: Two individuals who need income to continue after the first annuitant dies

A joint and survivor annuity continues income payments to the surviving annuitant after the first annuitant's death.

Which feature of a universal life policy allows the policyholder to skip premium payments without lapsing the policy?

Answer: Flexible premium option using accumulated cash value

Universal life policies can use accumulated cash value to cover premiums when the policyholder chooses not to pay, as long as sufficient cash value exists.

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

Answer: When both insureds have died

Survivorship life insurance pays the death benefit only after both insureds have died, making it popular for estate planning.