CA PSI LIFE ACCIDENT AND HEALTH EXAM 4
COMPREHENSIVE STUDY GUIDE
◉ Life insurance contracts.
Answer: Create an immediate estate.
◉ Term life insurance.
Answer: Provides pure or temporary protection and is the simplest
form of life insurance coverage.
◉ Decreasing term life insurance.
Answer: Provides a death benefit amount that decreases gradually
over the term of protection.
◉ Mortgage redemption insurance.
Answer: A type of decreasing term life insurance policy.
◉ Credit life insurance.
Answer: A limited benefit (term) policy designed to cover the life of
a debtor and pay the amount due on a loan if the debtor dies before
the loan is repaid.
,◉ Level term life insurance.
Answer: Provides a level amount of protection for a specified period,
after which the policy expires.
◉ Option to renew.
Answer: Allows the policy owner to renew the term policy before its
expiration date without being required to provide evidence of
insurability.
◉ Step-up premium.
Answer: A steady increase in the premium.
◉ Annually renewable term (ART).
Answer: Provides coverage for one year and allows the policy owner
to renew coverage each year, without evidence of insurability.
◉ Increasing term life insurance.
Answer: Provides a death benefit that increases at periodic intervals
over the policy's term.
◉ Option to convert.
Answer: Gives the insured the ability to convert or exchange the
term policy for a whole-life or permanent policy without evidence of
insurability.
,◉ Cost of insurance.
Answer: The key factor to consider when determining whether to
convert term life insurance at the insured's original age or the
insured's attained age.
◉ Interim term life insurance.
Answer: A type of convertible term insurance written on a person
who wants protection immediately but cannot afford permanent
protection immediately.
◉ Advantages of term life insurance.
Answer: Less expensive than permanent insurance and may protect
the insured's insurability if the policy is renewable and/or
convertible.
◉ Disadvantages of term life insurance.
Answer: The protection provided by term life insurance policies
terminates when the policy terminates.
◉ Whole life insurance.
Answer: Provides for the payment of a death benefit or face amount
of coverage upon the death of the insured, regardless of when the
death occurs.
, ◉ Ordinary whole life.
Answer: The most basic form of whole life insurance where
premiums are payable as long as the insured is alive.
◉ Limited payment whole life.
Answer: Predetermined premium for a limited payment period.
◉ Single-premium whole life policy.
Answer: The most expensive whole life policy initially, creating an
immediate nonforfeiture value (cash value).
◉ Modified whole life insurance.
Answer: Characterized by an initial premium lower than that of
straight whole life insurance for an introductory period.
◉ Graded premium whole life plan.
Answer: Characterized by a lower premium than straight whole life
in the early years, with premiums increasing annually for the initial
period.
◉ Enhanced whole life insurance.
COMPREHENSIVE STUDY GUIDE
◉ Life insurance contracts.
Answer: Create an immediate estate.
◉ Term life insurance.
Answer: Provides pure or temporary protection and is the simplest
form of life insurance coverage.
◉ Decreasing term life insurance.
Answer: Provides a death benefit amount that decreases gradually
over the term of protection.
◉ Mortgage redemption insurance.
Answer: A type of decreasing term life insurance policy.
◉ Credit life insurance.
Answer: A limited benefit (term) policy designed to cover the life of
a debtor and pay the amount due on a loan if the debtor dies before
the loan is repaid.
,◉ Level term life insurance.
Answer: Provides a level amount of protection for a specified period,
after which the policy expires.
◉ Option to renew.
Answer: Allows the policy owner to renew the term policy before its
expiration date without being required to provide evidence of
insurability.
◉ Step-up premium.
Answer: A steady increase in the premium.
◉ Annually renewable term (ART).
Answer: Provides coverage for one year and allows the policy owner
to renew coverage each year, without evidence of insurability.
◉ Increasing term life insurance.
Answer: Provides a death benefit that increases at periodic intervals
over the policy's term.
◉ Option to convert.
Answer: Gives the insured the ability to convert or exchange the
term policy for a whole-life or permanent policy without evidence of
insurability.
,◉ Cost of insurance.
Answer: The key factor to consider when determining whether to
convert term life insurance at the insured's original age or the
insured's attained age.
◉ Interim term life insurance.
Answer: A type of convertible term insurance written on a person
who wants protection immediately but cannot afford permanent
protection immediately.
◉ Advantages of term life insurance.
Answer: Less expensive than permanent insurance and may protect
the insured's insurability if the policy is renewable and/or
convertible.
◉ Disadvantages of term life insurance.
Answer: The protection provided by term life insurance policies
terminates when the policy terminates.
◉ Whole life insurance.
Answer: Provides for the payment of a death benefit or face amount
of coverage upon the death of the insured, regardless of when the
death occurs.
, ◉ Ordinary whole life.
Answer: The most basic form of whole life insurance where
premiums are payable as long as the insured is alive.
◉ Limited payment whole life.
Answer: Predetermined premium for a limited payment period.
◉ Single-premium whole life policy.
Answer: The most expensive whole life policy initially, creating an
immediate nonforfeiture value (cash value).
◉ Modified whole life insurance.
Answer: Characterized by an initial premium lower than that of
straight whole life insurance for an introductory period.
◉ Graded premium whole life plan.
Answer: Characterized by a lower premium than straight whole life
in the early years, with premiums increasing annually for the initial
period.
◉ Enhanced whole life insurance.
