Types of Life Policies

When the insured purchased a new home, he wanted to purchase a life insurance policy that would protect his family against losing it should he die before the mortgage was paid. Which of the following policies is best suitable for that need?

• Whole life

• Level term

• Decreasing term

• Return of premium

An annually renewable term policy

• Increases in premium based on the insured's health.

• Maintains a level premium each year.

• Renews each year with an increased premium.

• Increases in coverage each year.

The time period during which an annuitant contributes to an annuity is called

• The annuity period.

• The accumulation period.

• The deferred growth.

• The savings period.

An individual inherited a large sum of money at age 40 and wanted to use it to provide a guaranteed income after his retirement at age 60. Which of the following types of annuities would best meet this need?

• Immediate

• Flexible premium

• Deferred

• Variable

Which of the following is an example of a limited-pay life policy?

• Straight life

• Life paid-up at age 65

• Renewable term to age 70

• Endowment maturing at age 65

Which of the following features of the Indexed Whole Life policy is NOT fixed ?

• Premium

• Death benefit

• Policy period

• Cash value growth

Which of the following statements is true regarding a universal life policy?

• The insurer sets the cash value and premium payment period.

• The death benefit can be increased without evidence of insurability.

• The premiums can be decreased by the insured.

• It is issued without a guaranteed interest rate.

With a traditional whole life policy, the death benefit

• Remains constant over time.

• Increases over time.

• Decreases over time.

• Becomes pure death protection after 20 years.

Whose life expectancy is taken into consideration in an annuity?

• Owner

• Annuitant

• Beneficiary

• Life expectancy is not a factor in annuities.

An insured receives a monthly summary of his life insurance policy. The cash value this month is significantly lower than it was last month. What type of policy is it?

• Adjustable

• Variable

• Term

• Whole life