Ch. 2: Types of Policies

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 of policy is it?

• Variable Life

• Adjustable Life

• Graded Premium Life

• Limited-pay Life

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

• Variable Life

• Adjustable Life

• Universal Life

• Flexible Life

What license or licenses are required to sell variable annuities?

• No license is required

• Both a life insurance license and a securities license

• Only a life insurance license

• Only a securities license

Which of the following types of policies will provide permanent protection?

• Term life

• Group life

• Whole life

• Credit life

In a survivorship life policy, when does the insurer pay the death benefit?

• Upon the last death

• Upon the first death

• Half at the first death, and half at the second death

• If the insured survives to age 100

Which policy component decreases in decreasing term insurance?

• Dividend

• Premium

• Face amount

• Cash value

When an annuity is written, whose life expectancy is taken into account?

• Life expectancy is not a factor when writing an annuity.

• Owner

• Annuitant

• Beneficiary

An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy’s cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?

• Adjustable Life

• Term Life

• Limited Pay

• Universal Life

Which of the following best describes what the annuity period is?

• The period of time during which accumulated money is converted into income payments.

• The period of time from the accumulation period to the annuitization period

• The period of time during which money is accumulated in an annuity

• The period of time from the effective date of the contract to the date of its termination

The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

• Convertible term policy

• Renewable term policy

• Decreasing term policy

• Whole life policy