LOMA 280 Ch 1-7 Questions with Correct
Answers
Coverage Unit Usually equals $1,000 of coverage
Estate Accumulated assets an individual owns at time of death.
Will Legal document directing how property is to be distributed.
key person life insurance individual life insurance a business purchases on the life of a
key person.
buy-sell agreement one party agrees to purchase financial interest that a 2nd party has in a
business following the 2nd party's death; and, the 2nd party agrees to direct his estate to sell his
interest in the business to the purchasing party.
Mortgage Life Insurance provides benefit amount that corresponds to decreasing amount
owned on a mortgage loan.
,credit life insurance term life designed to pay outstanding balance on loans at death
Family Income coverage Provides a stated monthly income benefit amount.
policy rider/endorsement amendment to life policy that becomes part of the contract,
either expanding or limiting the benefits payable under the contract
family income policy Cash value policy with a family income coverage rider
increasing term insurance policy often purchased as rider, for limited time to meet a need.
renewable term insurance policy gives owner option to continue coverage at the end of the
specified term w/o evidence of insurability (proof insured continues to be insurable risk).
renewal provision Gives insured right to continue coverage w/o evidence of insurability
**Allows policy to be the same or smaller amount/period; cannot be larger face
amount/period**
, attained age Age on the renewal date, causing premium rate to increase typically
Yearly Renewable Term (YRT) renewable for stated number of years (Annual Term -
ART)
Convertible term allows owner to change/convert term to cash value policy w/o providing
evidence that the insured is an insurable risk. Located in conversion privilege
Attained age conversion premium rate for cash value policy is based on the insured's age
at the time the policy is converted.
original age conversion premium rate for cash policy based on insured's age at original
issue.
return of premium (ROP) term promises return of premium if insured does not die during
term.
Whole life Coverage at level premium rate that does not change as insured ages.
Answers
Coverage Unit Usually equals $1,000 of coverage
Estate Accumulated assets an individual owns at time of death.
Will Legal document directing how property is to be distributed.
key person life insurance individual life insurance a business purchases on the life of a
key person.
buy-sell agreement one party agrees to purchase financial interest that a 2nd party has in a
business following the 2nd party's death; and, the 2nd party agrees to direct his estate to sell his
interest in the business to the purchasing party.
Mortgage Life Insurance provides benefit amount that corresponds to decreasing amount
owned on a mortgage loan.
,credit life insurance term life designed to pay outstanding balance on loans at death
Family Income coverage Provides a stated monthly income benefit amount.
policy rider/endorsement amendment to life policy that becomes part of the contract,
either expanding or limiting the benefits payable under the contract
family income policy Cash value policy with a family income coverage rider
increasing term insurance policy often purchased as rider, for limited time to meet a need.
renewable term insurance policy gives owner option to continue coverage at the end of the
specified term w/o evidence of insurability (proof insured continues to be insurable risk).
renewal provision Gives insured right to continue coverage w/o evidence of insurability
**Allows policy to be the same or smaller amount/period; cannot be larger face
amount/period**
, attained age Age on the renewal date, causing premium rate to increase typically
Yearly Renewable Term (YRT) renewable for stated number of years (Annual Term -
ART)
Convertible term allows owner to change/convert term to cash value policy w/o providing
evidence that the insured is an insurable risk. Located in conversion privilege
Attained age conversion premium rate for cash value policy is based on the insured's age
at the time the policy is converted.
original age conversion premium rate for cash policy based on insured's age at original
issue.
return of premium (ROP) term promises return of premium if insured does not die during
term.
Whole life Coverage at level premium rate that does not change as insured ages.
