CFT Exam Questions with Verified
Solutions13
Indexed universal life (IUL) insurance is? - ANSWERS-A type of life insurance plan that is different
from whole life and term insurance
What are the differences between Whole Life and IUL? - ANSWERS-In general, IUL has higher
growth potential in cash value than Whole Life
Indexed Universal Life (IUL) Insurance is? - ANSWERS-A type of life insurance plan that is
different from whole life and term insurance
Which of the following life insurance policies has the lowest policy premium for a certain period
of time up to 30 years? - ANSWERS-Term life
Which of the following is a key characteristic of a Universal Life (VUL) policy? - ANSWERS-Cash
values are guaranteed to grow
Which is NOT true about Variable universal Life (VUL) Insurance? - ANSWERS-Cash values are
guaranteed to grow
When a term policy converts into a permanent life policy with the same health rating without
any medical underwriting requirements, the process is known as? - ANSWERS-Term conversion
Which is the best way to determine someone's life insurance needs? - ANSWERS-Ask the client
, What are the different products we can offer to clients? - ANSWERS-Term, UL, GUL, Whole Life,
IUL, and Fixed indexed Annuity
What is the main feature(s) of the Equity Indexed concept? - ANSWERS-Downside protection,
upside growth potential
Which one is the best strategy selection for IUL? - ANSWERS-There's no such thing as the best
strategy because strategy allocation can vary based on individual's risk tolerance and goals; it's
strictly based on suitability
What do the Accelerated Benefits Riders (sometimes known as living benefits) in life insurance
refer to specifically? - ANSWERS-Terminal, Chronic, Critical Illness, Critical injury
What is the most important factor(s) to consider when designing an IUL policy for a client? -
ANSWERS-The client's affordability, needs, goals, suitability
On the IUL illustration the Guaranteed Values column eventually become zeros after some time,
regardless of the amount and/or duration of the premium. The reason: - ANSWERS-This
represents the worst-case scenario of interest earned and fees charged, therefore resulting in
lapse of the policy. The is must be fully disclosed to clients at all times
On the IUL illustration, the Current Values column is? - ANSWERS-Not guaranteed and the actual
results can be better or worse
Which of the following is true about Option "A" (level) and Option "B" (increasing) of an IUL
policy? - ANSWERS-Both Options can be suitable, it really depends on the client's goals, needs,
and affordability, and any other suitability factors.
Let's assume a policy has a $1,000,000 death benefit, Option A (Level). The client has a critical
illness and filed a claim. The company offers the client a full Acceleration payout of $600,000.
The client chooses to accelerate ALL of the offers and therefore receives a check for $600,000.
Solutions13
Indexed universal life (IUL) insurance is? - ANSWERS-A type of life insurance plan that is different
from whole life and term insurance
What are the differences between Whole Life and IUL? - ANSWERS-In general, IUL has higher
growth potential in cash value than Whole Life
Indexed Universal Life (IUL) Insurance is? - ANSWERS-A type of life insurance plan that is
different from whole life and term insurance
Which of the following life insurance policies has the lowest policy premium for a certain period
of time up to 30 years? - ANSWERS-Term life
Which of the following is a key characteristic of a Universal Life (VUL) policy? - ANSWERS-Cash
values are guaranteed to grow
Which is NOT true about Variable universal Life (VUL) Insurance? - ANSWERS-Cash values are
guaranteed to grow
When a term policy converts into a permanent life policy with the same health rating without
any medical underwriting requirements, the process is known as? - ANSWERS-Term conversion
Which is the best way to determine someone's life insurance needs? - ANSWERS-Ask the client
, What are the different products we can offer to clients? - ANSWERS-Term, UL, GUL, Whole Life,
IUL, and Fixed indexed Annuity
What is the main feature(s) of the Equity Indexed concept? - ANSWERS-Downside protection,
upside growth potential
Which one is the best strategy selection for IUL? - ANSWERS-There's no such thing as the best
strategy because strategy allocation can vary based on individual's risk tolerance and goals; it's
strictly based on suitability
What do the Accelerated Benefits Riders (sometimes known as living benefits) in life insurance
refer to specifically? - ANSWERS-Terminal, Chronic, Critical Illness, Critical injury
What is the most important factor(s) to consider when designing an IUL policy for a client? -
ANSWERS-The client's affordability, needs, goals, suitability
On the IUL illustration the Guaranteed Values column eventually become zeros after some time,
regardless of the amount and/or duration of the premium. The reason: - ANSWERS-This
represents the worst-case scenario of interest earned and fees charged, therefore resulting in
lapse of the policy. The is must be fully disclosed to clients at all times
On the IUL illustration, the Current Values column is? - ANSWERS-Not guaranteed and the actual
results can be better or worse
Which of the following is true about Option "A" (level) and Option "B" (increasing) of an IUL
policy? - ANSWERS-Both Options can be suitable, it really depends on the client's goals, needs,
and affordability, and any other suitability factors.
Let's assume a policy has a $1,000,000 death benefit, Option A (Level). The client has a critical
illness and filed a claim. The company offers the client a full Acceleration payout of $600,000.
The client chooses to accelerate ALL of the offers and therefore receives a check for $600,000.
