chp 3 life ins exam study

What type of life insurance policy provides permanent protection?

Whole life

In a joint life policy, when is the death benefit paid?

Upon the first death

A policy states that it will pay a specified face amount if the insured dies during the 20 year premium-paying period and nothing if death occurs after the 20 year period. What type of policy is this?

20-year level term

The death protection component of a universal life policy is expressed as what type of coverage?

Annually renewable term

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?

Variable

When would a 20-pay whole life policy endow?

When the insured reaches age 100

In variable universal life insurance, to what policy component does the term variable refer?

Cash value and death benefit

What is the purpose of establishing the target premium for a universal life policy?

To prevent the policy from lapsing

In term policies, what happens to the premium throughout the term of the policy?

The premium remains level

What happens to the premium in an annually renewable term life policy?

The premium increases with each renewal

What type of life insurance policy offers pure death protection?

Term

In what type of life insurance policies can the policyowner skip premium payments without the policy lapsing?

Universal life

When does an adjustable life policy accumulate cash value?

When the premiums paid are more than the cost of the policy

Universal life policies have two types of interest rates. What are they?

Guaranteed and current

What is the main advantage of converting from group life insurance to individual coverage?

Evidence of insurability is not required.

An individual has just borrowed $10,000 on a 5-year note from his bank. The note is due in installments. What type of life insurance policy would be best suited to this situation?

Decreasing term

In annually renewable term policies, what is the annual premium based upon?

The insured's attained age

What are the characteristics of the group that underwriters will consider before issuing a group life policy?

Group's purpose, size, financial strength and turnover