LLQP Life Insurance Product Types 5

Question 1

Which type of life insurance product is typically sold without a medical exam, using only a short health questionnaire to determine eligibility?

Accepted Answer

Simplified issue life insurance

Answer

Simplified issue life insurance uses a brief health questionnaire instead of a full medical exam, trading faster approval for higher premiums or lower coverage limits.

Question 2

A 'limited pay' whole life policy (e.g., 20-Pay Life) differs from straight whole life because:

Accepted Answer

Premiums are paid for a limited period but coverage lasts for life

Answer

A limited pay policy requires premium payments only for a set number of years (e.g., 20), after which the policy is paid-up and coverage continues for the insured's lifetime.

Question 3

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

Accepted Answer

Flexible premium structure using accumulated cash value

Answer

Universal life's flexible premium design allows the policyholder to reduce or skip premiums as long as sufficient cash value exists to cover the monthly deductions for cost of insurance and expenses.

Question 4

A 'single premium' life insurance policy is characterized by:

Accepted Answer

One lump-sum payment that fully funds the policy at issue

Answer

A single premium policy requires only one lump-sum payment at inception, after which the policy is immediately paid-up and no further premiums are owed.

Question 5

What is the primary purpose of a 'key person' life insurance policy purchased by a business?

Accepted Answer

To indemnify the business against financial loss caused by the death of a vital employee or owner

Answer

Key person insurance protects a business from the economic impact of losing an owner or employee whose skills, knowledge, or relationships are critical to business operations.

LLQP - Life License Qualification Program Practice Test

LLQP - Life License Qualification Program Practice Test

LLQP Life Insurance Product Types 5