ExamFX Life chapter 2 Questions With Complete Solutions
What type of life insurance policy provides permanent protection? correct answer: Whole life
What type of annuity requires an agent to have a securities license? correct answer: Variable annuity
Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary? correct answer: The full death benefit
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? correct answer: 20-year level term
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? correct answer: Decreasing term
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity? correct answer: The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant's death What happens to the premium in an annually renewable term life
policy? correct answer: The premium increases with each renewal
In a joint life policy, when is the death benefit paid? correct answer: Upon the first death
What are the two phases of an annuity? correct answer: Accumulation and annuitization (or pay-in and pay-out)
What policy component must decrease in decreasing term insurance? correct answer: Face amount
Whole life policies provide protection until the insured reaches what age? correct answer: Age 100
Why are policy loans not available on term insurance? correct answer: There is no cash value to borrow against
What type of annuity credits it's interest based upon an index such as S&P 500? correct answer: Equity indexes annuity
In an annuity, the accumulated money is converted into a stream
of income during which phase? correct answer: Annuitization period
What type of annuity can be purchased with a single premium? correct answer: Immediate annuity
Who bears the investment risk in a fixed annuity? correct answer: The insurer
What type of life insurance policy provides permanent protection? correct answer: Whole life
What type of annuity requires an agent to have a securities license? correct answer: Variable annuity
Whole life insurance policies mature when the insured reaches the age of 100. If the owner of a whole life policy (the insured) dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary? correct answer: The full death benefit
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? correct answer: 20-year level term
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? correct answer: Decreasing term
Regarding annuity payments, what is the difference between the annuitant and the beneficiary of an annuity? correct answer: The annuitant receives payments from the annuity during the annuitization period; the beneficiary receives benefits after the annuitant's death What happens to the premium in an annually renewable term life
policy? correct answer: The premium increases with each renewal
In a joint life policy, when is the death benefit paid? correct answer: Upon the first death
What are the two phases of an annuity? correct answer: Accumulation and annuitization (or pay-in and pay-out)
What policy component must decrease in decreasing term insurance? correct answer: Face amount
Whole life policies provide protection until the insured reaches what age? correct answer: Age 100
Why are policy loans not available on term insurance? correct answer: There is no cash value to borrow against
What type of annuity credits it's interest based upon an index such as S&P 500? correct answer: Equity indexes annuity
In an annuity, the accumulated money is converted into a stream
of income during which phase? correct answer: Annuitization period
What type of annuity can be purchased with a single premium? correct answer: Immediate annuity
Who bears the investment risk in a fixed annuity? correct answer: The insurer
