CFT Exam with all Correct & 100% Verified Answers |
Latest Version |Already Graded A+
Indexed universal life (IUL) insurance is? ✔Correct Answer-A type of life insurance plan that is
different from whole life and term insurance
What are the differences between Whole Life and IUL? ✔Correct Answer-In general, IUL has
higher growth potential in cash value than Whole Life
Which of the following is a key characteristic of a Universal Life (UL) policy? ✔Correct Answer-
Cash values are guaranteed to grow
Which is NOT true about Variable universal Life (VUL) Insurance? ✔Correct Answer-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? ✔Correct Answer-Term
conversion
Which is the best way to determine someone's life insurance needs? ✔Correct Answer-Fact
Finder
What are the different products we can offer to clients? ✔Correct Answer-Term, UL, GUL,
Whole Life, IUL, and Fixed indexed Annuity
What is the main feature(s) of the Equity Indexed concept? ✔Correct Answer-Downside
protection, upside growth potential
Which one is the best strategy selection for IUL? ✔Correct Answer-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? ✔Correct Answer-All permanent life products only
What is the most important factor(s) to consider when designing an IUL policy for a client?
✔Correct Answer-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: ✔Correct Answer-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? ✔Correct Answer-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? ✔Correct Answer-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.
After a few years, the client passes away. How much money is left for the beneficiary?
✔Correct Answer-$0
With an IUL, the Participation Rate is? ✔Correct Answer-(how much premium money is being
credited/put into the index)
An IUL plan needs to be monitored to make sure that ✔Correct Answer-It is being funded at
an appropriate premium level based on the earned interest rate
Let's assume a policy has a $1,000,000 death benefit, Option A (Level). The client has a critical
illness and files a claim. The company offers the client a full Acceleration payout of $600,000.
However, the client chooses only to accelerate HALF of the offer and therefore receives a check
for $300,000. A few years later, the client passes away. How much money is left for the
beneficiary? ✔Correct Answer-$500,000
When the interest credit depends only on the difference between the beginning and end index
value each year, it is called? ✔Correct Answer-Annual point to point crediting method
IUL policies have a feature allowing any gains to be locked-In to the Index Account at the end of
each index crediting period. This is called? ✔Correct Answer-An annual reset feature
Assuming an IUL policy linked to the S&P 500 index has a Cap of 12% and a participation Rate of
140% in one of the strategies: If the S&P 500 index returns 10% in a given year, what interest
rate will be credited to this strategy as a result? ✔Correct Answer-12%
Many Equity Indexed Annuities (EIA) today offer a premium bonus as an incentive. However,
bonuses are not free because the bigger the bonus is? ✔Correct Answer-The longer the
surrender charge period and the higher the crediting strategy caps
After years of putting his hard earned money into an EIA with a lifetime income rider, the
accumulation value of John's EIA is $500,000 and the income value is $600,000. Assuming John
is over 60 ears old - what is the maximum lump-sum amount he can take out if he was going to
surrender the policy? ✔Correct Answer-$500,000
Latest Version |Already Graded A+
Indexed universal life (IUL) insurance is? ✔Correct Answer-A type of life insurance plan that is
different from whole life and term insurance
What are the differences between Whole Life and IUL? ✔Correct Answer-In general, IUL has
higher growth potential in cash value than Whole Life
Which of the following is a key characteristic of a Universal Life (UL) policy? ✔Correct Answer-
Cash values are guaranteed to grow
Which is NOT true about Variable universal Life (VUL) Insurance? ✔Correct Answer-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? ✔Correct Answer-Term
conversion
Which is the best way to determine someone's life insurance needs? ✔Correct Answer-Fact
Finder
What are the different products we can offer to clients? ✔Correct Answer-Term, UL, GUL,
Whole Life, IUL, and Fixed indexed Annuity
What is the main feature(s) of the Equity Indexed concept? ✔Correct Answer-Downside
protection, upside growth potential
Which one is the best strategy selection for IUL? ✔Correct Answer-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? ✔Correct Answer-All permanent life products only
What is the most important factor(s) to consider when designing an IUL policy for a client?
✔Correct Answer-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: ✔Correct Answer-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? ✔Correct Answer-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? ✔Correct Answer-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.
After a few years, the client passes away. How much money is left for the beneficiary?
✔Correct Answer-$0
With an IUL, the Participation Rate is? ✔Correct Answer-(how much premium money is being
credited/put into the index)
An IUL plan needs to be monitored to make sure that ✔Correct Answer-It is being funded at
an appropriate premium level based on the earned interest rate
Let's assume a policy has a $1,000,000 death benefit, Option A (Level). The client has a critical
illness and files a claim. The company offers the client a full Acceleration payout of $600,000.
However, the client chooses only to accelerate HALF of the offer and therefore receives a check
for $300,000. A few years later, the client passes away. How much money is left for the
beneficiary? ✔Correct Answer-$500,000
When the interest credit depends only on the difference between the beginning and end index
value each year, it is called? ✔Correct Answer-Annual point to point crediting method
IUL policies have a feature allowing any gains to be locked-In to the Index Account at the end of
each index crediting period. This is called? ✔Correct Answer-An annual reset feature
Assuming an IUL policy linked to the S&P 500 index has a Cap of 12% and a participation Rate of
140% in one of the strategies: If the S&P 500 index returns 10% in a given year, what interest
rate will be credited to this strategy as a result? ✔Correct Answer-12%
Many Equity Indexed Annuities (EIA) today offer a premium bonus as an incentive. However,
bonuses are not free because the bigger the bonus is? ✔Correct Answer-The longer the
surrender charge period and the higher the crediting strategy caps
After years of putting his hard earned money into an EIA with a lifetime income rider, the
accumulation value of John's EIA is $500,000 and the income value is $600,000. Assuming John
is over 60 ears old - what is the maximum lump-sum amount he can take out if he was going to
surrender the policy? ✔Correct Answer-$500,000
