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Life Insurance Policies
Life Insurance Policies MCQs
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A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insura...
The group has not been established for long enough.
The purpose of the group was to purchase life insurance.
Their profession poses too high of a risk for the insurer.
There are not enough people in the group to qualify for group life insurance
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At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be ...
Single Premium Whole Life
Interest-sensitive Whole Life
Decreasing Term
Adjustable Life
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Which of the following statements about group life is correct
The premiums are higher than in an individual policy because there is no medical exam.
The group sponsor receives a Certificate of Insurance.
The policy can be converted to an individual term insurance policy.
The cost of coverage is based on the ratio of men and women in the group
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Which of the following best describes annually renewable term insurance
It requires proof of insurability at each renewal.
Neither the premium nor the death benefit is affected by the insured's age.
It provides an annually increasing death benefit.
It is level term insurance
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Which of the following is an example of a limited-pay life policy
Renewable Term to Age 70
Level Term Life
Straight Life
Life Paid-up at Age 65
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Which of the following policies would be classified as a traditional level premium contract
Adjustable Life
Universal Life
Variable Universal Life
Straight Life
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A man decided to purchase a $100,000 Annually Renewable Term Life policy to provide additional protection until his children finished college. He disc...
Required a premium increase each renewal.
Built cash values.
Required proof of insurability every year.
Decreased death benefit at each renewal
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A Straight Life policy has what type of premium?
A decreasing annual premium for the life of the insured
A variable annual premium for the life of the insured
A level annual premium for the life of the insured
An increasing annual premium for the life of the insured
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All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy
Half the amount
Lower
Higher
As high
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An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his ...
Nothing
$50,000
$100,000
$200,000
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In a group life insurance policy, the employer may select all of the following EXCEPT
The amount of insurance.
The premium payor.
The beneficiary.
The type of insurance
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An Adjustable Life policyowner can change which of the following policy features
The insured
The coverage period
The mortality expense
The investment account
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Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incu...
Ordinary Life
Joint Life
Decreasing Term
Whole Life
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To sell variable life insurance policies, an agent must receive all of the following EXCEPT
A securities license.
A life insurance license.
A SEC registration.
A FINRA registration
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The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change
The death benefit can be increased only by exchanging the existing policy for a new one.
The death benefit can be increased by providing evidence of insurability.
The death benefit cannot be increased.
The death benefit can be increased only when the policy has developed a cash value
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An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind o...
Variable Life
Adjustable Life
Graded Premium Life
Limited-pay Life
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In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
The length of coverage.
The premium.
The amount of insurance.
The type of investment
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Which of the following are generally NOT considered when underwriting group insurance
The size of the group
The insureds’ medical history
The nature of the group
The group's past claim experience
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All of the following are true regarding a decreasing term policy EXCEPT
The contract pays only in the event of death during the term and there is no cash value.
The face amount steadily declines throughout the duration of the contract.
The payable premium amount steadily declines throughout the duration of the contract.
The death benefit is $0 at the end of the policy term
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Which of the following is called a "second-to-die" policy
Family income
Juvenile life
Joint life
Survivorship life
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In a survivorship life policy, when does the insurer pay the death benefit
If the insured survives to age 100
Upon the last death
Upon the first death
Half at the first death, and half at the second death
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Which of the following best defines target premium in a universal life policy
The maximum amount the policyowner may pay on a policy
The minimum amount to make sure the policy is annually renewable
The corridor of insurance
The recommended amount to keep the policy in force throughout its lifetime
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An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his
Experience Rating.
Group rate.
Insurer's scheduled rate.
Attained age
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An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy woul...
Variable life
Universal life
Whole life
Decreasing term
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An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on...
The insurer will pay nothing because the employee has terminated his group insurance and hasn't started the individual one.
The insurer will pay the full death benefit from the group policy to the beneficiary.
The insurer will pay a reduced death benefit to the beneficiary.
The insurer will pay the death benefit minus one month's premium
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An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain ...
She will still be covered under the group plan, but will have to pay an individual policy premium.
She can only convert her coverage without proof of insurability if she has the master policy.
She must apply for a new policy, which requires her to provide proof of insurability.
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan
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All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
Federal government.
The SEC.
The Insurance Department
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Which Universal Life option has a gradually increasing cash value and a level death benefit
Term insurance
Option B
Option A
Juvenile life
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Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
Until the policyowner's age 100, when the policy matures.
For 20 years or until death, whichever occurs first.
Until the policyowner's age 65.
For 20 years
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Concerning Juvenile Life insurance, which of the following statements is INCORRECT
Usually a parent or guardian is the applicant for insurance on the life of a minor.
It can be a limited premium payment policy.
Juvenile Life is classified as any life insurance written on the life of a minor.
Juvenile Life is classified as any life insurance purchased by a minor
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All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance.
A group sponsored by an employer.
An alumni group.
A debtor group
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An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures a...
Single premium whole life.
Modified Endowment Contract (MEC).
Level term life.
Graded premium whole life
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Annually renewable term policies provide a level death benefit for a premium that
Decreases annually.
Remains level.
Fluctuates
Increases annually
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Which of the following best describes annually renewable term insurance
It is level term insurance.
It requires proof of insurability at each renewal.
Neither the premium nor the death benefit is affected by the insured's age.
It provides an annually increasing death benefit
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A Universal Life insurance policy has two types of interest rates that are called
Option A and Option B.
Fixed and Variable.
Minimum and Target.
Guaranteed and Current
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A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which p...
Joint Life Policy
Survivorship Life Policy
Second-to-Die
Family Income Policy
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Which of the following would help prevent a universal life policy from lapsing
Corridor of insurance
Target premium
Face amount
Adjustable premium
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If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may
Require a higher premium.
Prolong the open enrollment period.
Increase medical requirements on existing members.
Require evidence of insurability
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Which statement is NOT true regarding a Straight Life policy
It has the lowest annual premium of the three types of Whole Life policies.
Its premium steadily decreases over time, in response to its growing cash value.
The face value of the policy is paid to the insured at age 100.
It usually develops cash value by the end of the third policy year
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If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is thi...
Limited pay whole life policy
Modified life insurance policy
Single premium policy
Jumping juvenile policy
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Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to co...
Variable life
Adjustable life
Universal life
Flexible life
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Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right p...
Life annuity with period certain
Increasing term
Limited pay whole life
Interest-sensitive whole life
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All other factors being equal, the least expensive first-year premium payment is found in
Increasing Term.
Decreasing Term.
Level Term.
Annually Renewable Term
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An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT...
The premium for individual coverage will be based upon the insured's attained age.
The insured may choose to convert to term or permanent individual coverage.
The insured would not need to prove insurability for a conversion policy.
The insured may convert coverage to an individual policy within 31 days
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All of the following are characteristics of a group life insurance plan EXCEPT
The cost of the plan is determined by the average age of the group.
There is a requirement to prove insurability on the part of the participants.
The participants receive a Certificate of Insurance as their proof of insurance.
A minimum number of participants is required in order to underwrite the plan
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Which type of life insurance policy allows the policyowner to pay more or less than the planned premium
Straight whole life
Universal life
Variable life
Decreasing term
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Which of the following is TRUE about credit life insurance
Debtor is the policy beneficiary.
Creditor is the policyowner.
Debtor is the annuitant.
Creditor is the insured
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When would a 20-pay whole life policy endow
After 20 payments
In 20 years
When the insured reaches age 100
At the insured's age 65
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Which of the following Life Insurance policies would be considered interest sensitive
Whole life
Increasing term
Universal life
Adjustable life
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An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. Wh...
It will decrease for the new 5-year term since the insured is now a lesser risk to the company.
It will increase each year during the next 5 years as the face amount increases each year.
It will increase because the insured will be 5 years older than when the policy was originally purchased.
It will remain the same for the new 5-year term
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Which policy component decreases in decreasing term insurance
Face amount
Cash value
Dividend
Premium
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Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the pla...
Those who have worked in the company for at least 3 years
Those who have dependents
Those who have no history of claims
Those who have been insured under the plan for at least 5 years
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Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured
Corridor option
Variable option
Option A
Option B
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Which of the following would be the beneficiary in credit life insurance
Insured
Company
Borrower
Creditor
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Which type of life insurance policy generates immediate cash value
Single Premium
Level Term
Decreasing Term
Continuous Premium
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Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit
Equity Indexed Universal Life
Variable Universal Life
Universal Life - Option A
Universal Life - Option B
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When an employee terminates coverage under a group insurance policy, coverage continues in force
For 60 days.
Until the employee can obtain coverage under a new group plan.
Until the employee notifies the group insurance provider that coverage conversion policy is issued.
For 31 days
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All of the following are characteristics of group life insurance EXCEPT
Amount of coverage is determined according to nondiscriminatory rules.
Individuals covered under the policy receive a certificate of insurance.
Certificate holders may convert coverage to an individual policy without evidence of insurability.
Premiums are determined by the age, sex and occupation of each individual certificate holder
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What is the purpose of establishing the target premium for a universal life policy
To pay up the policy faster
To cover all policy expenses
To keep the policy in force
To accumulate cash value faster
