Life Prep

Match the following

• Applicants morals, hobbies, habits...

• Application Part 2

• General, gender, martial, residence, DOB

• APS

• Producer statement on the applicant

• Application Part 1

• Medical Background, height/weight...

• Inspection Report

• Attending Physician Statement

• Agent Report

Match the following policies

• DB decreases, premiums stay level.

• Annually Renewable Term

• DB Increases, premiums stay level.

• Return of Prem. Term

• Death benefit and prem. remain level

• Level

• Increasing term, refunds premium.

• Increasing

• DB Stays level, premiums increase.

• Decreasing

Organize these options into the right categories

Groups:

(a) Term Insurance

,

(b) Permanent Insurance

• Coverage may be renewable

• Premiums may be payable for life, a limited period, or as a lump sum

• Premium builds a reserve known as cash value

  
  

• Written for a specified time period or to a specified age

• Policy matures or endows when cash value equals the face amount

• Policy loans available

• Death benefits may be level, decreasing, or increasing

• Issued with a level face amount

• Coverage may not be convertible

• Pure insurance

• Temporary protection

• Designed to provide coverage for a lifetime

  
  

Organize these options into the right categories

Groups:

(a) Whole Life

,

(b) Universal Life

,

(c) Variable life

,

(d) Variable Universal Life

• Fixed Premium VL

• Policyholder bears risk VUL

• Insurer holds risk UL

• Loans Available VL

• Cash value not guaranteed VUL

• Fixed Premium

• Loans and partial surrenders available

• Flexible premium

• Cash Value not guaranteed

• Loans available

• Variable and Adjustable, no guaranteed min. Death benefit

• Insurer holds risk WL

• Flexible Premium VUL

• Variable, guaranteed min. Death benefit

• Guaranteed min. Cash value Return Rate

• Loans and partial surrenders available VUL

• Guaranteed Cash Value Return Rate

• Fixed, guaranteed min. Death benefit

• Policyholder bears risk

• Adjustable, guaranteed min. Death benefit

Which of the following products requires a producer to obtain a securities registration in addition to an insurance license to solicit?

• Indexed Life

• Variable Universal

• Universal Life

• Current Assumption Whole Life

All of the following statements regarding sources of underwriting are correct, except:

• A consumer investigative report may include a credit report

• A medical exam may be requested based on the amount of coverage being applied for

• The applicant may be denied coverage based solely on the MIB report

• The agent’s report is confidential between the producer and the insurer

Organize these options into the right categories

Groups:

(a) Universal Life

,

(b) Variable Life

• Adjustable Face amount

• No guaranteed min on cash value

• Flexible Premium

• Cash value in separate account fluctuates on market conditions

• Fixed premium

• Need FINRA license

• Partial withdrawal or surrender available

• Guaranteed min. rate of return on Cash Value

• Policy owner holds all investment risk

• 2 death benefit options

• Death benefit varies along with performance in separate account

• Mortality charge for cost of pure insurance deducted monthly

Increases in insurance protection to keep a Current Assumption policy from endowing is provided:

• With simply part 1 of the application completed

• With limited underwriting

• With full underwriting

• Without evidence of insurability

Answer explanation

It is possible that the cash value will increase too quickly and could cause the policy to mature prior to age 100. To prevent this from happening, the insurer will add a corridor of insurance protection without requiring evidence of insurability to keep the policy from endowing.

How does an Option A death benefit feature of a Universal Life policy work?

• It pays out the policy's cash values

• It pays out the policy's face amount plus the cash values

• It pays out the face amount less the cash values

• It pays out the policy's face amount

Tom submits an application and a premium check. Six days later, the insurer issues the policy as applied for and mails it overnight to Tom's producer. Tom picks up the policy at his producer's office the next day. When did Tom's coverage begin?

• The day Tom picked up his policy at his producer's office

• The day Tom submitted his application

• The day the insurer mailed the policy

• The day the insurer issued the policy