Pearson Vue Life Practice Exam
Universal Life - ANS-a whole life policy that combines term insurance and investment
elements
Modified Whole Life - ANS-Low premiums in the early years and jumps to a higher
premium in the later years and remains fixed thereafter. Premiums increase just once.
Graded Premium Whole Life - ANS-Variation of a traditional whole life contract providing
for lower than normal premium rates during the first few policy years, with premiums
increasing gradually each year. After the preliminary period, premiums level off and
remain constant.
Variable Universal Life - ANS-Builds cash value that can be invested in separate
accounts (Need Securities License)
Interest Sensitive Whole Life - ANS-Coverage provides flexible premiums based on a
changing interest rate. Synonymous with current assumption whole life.
(High rate=Low Prem: Low Rate=Raise Prem)
Equity Indexed Universal Life - ANS-Works the same way as universal life insurance
except the interest rate is tied to a stock market index.
Ordinary Life - ANS-Basic whole life with level face amount and premium
Limited Pay - ANS-Coverage for life with limited premium payments
Adjustable Life - ANS-Life insurance which permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period.
Fixed - ANS-Constant Interest Rate
Variable - ANS-Fluctuating Interest Rate
Participating - ANS-Pay dividends to policyholders,
Nonparticipating - ANS-Pay dividends to shareholders (Stock Companies)
Universal Life - ANS-a whole life policy that combines term insurance and investment
elements
Modified Whole Life - ANS-Low premiums in the early years and jumps to a higher
premium in the later years and remains fixed thereafter. Premiums increase just once.
Graded Premium Whole Life - ANS-Variation of a traditional whole life contract providing
for lower than normal premium rates during the first few policy years, with premiums
increasing gradually each year. After the preliminary period, premiums level off and
remain constant.
Variable Universal Life - ANS-Builds cash value that can be invested in separate
accounts (Need Securities License)
Interest Sensitive Whole Life - ANS-Coverage provides flexible premiums based on a
changing interest rate. Synonymous with current assumption whole life.
(High rate=Low Prem: Low Rate=Raise Prem)
Equity Indexed Universal Life - ANS-Works the same way as universal life insurance
except the interest rate is tied to a stock market index.
Ordinary Life - ANS-Basic whole life with level face amount and premium
Limited Pay - ANS-Coverage for life with limited premium payments
Adjustable Life - ANS-Life insurance which permits changes in the face amount,
premium amount, period of protection, and the duration of the premium payment period.
Fixed - ANS-Constant Interest Rate
Variable - ANS-Fluctuating Interest Rate
Participating - ANS-Pay dividends to policyholders,
Nonparticipating - ANS-Pay dividends to shareholders (Stock Companies)
