OVERVIEW OF LIFE INSURANCE AND ANNUITIES QUESTIONS WITH
ACCURATE ANSWERS.
Term Insurance - accurate answers-Temporary protection that provides
coverage for a specific period of time, known as pure life insurance.
Death Benefit - accurate answers-The amount paid to the beneficiary if the
insured dies during the term of the policy.
Pure Death Protection - accurate answers-Coverage that pays the death
benefit only if the insured dies during the term; no cash value or living
benefits are provided.
Temporary Protection - accurate answers-Insurance coverage that is limited
to a specific period, as opposed to permanent protection.
Permanent Protection - accurate answers-Insurance coverage that lasts for
the insured's lifetime and may include a cash value component.
Level Term Insurance - accurate answers-A type of term insurance where the
death benefit does not change throughout the life of the policy.
Annually Renewable Term (ART) - accurate answers-A form of term insurance
with a level death benefit that is guaranteed to be renewable each year, but
with increasing premiums.
Decreasing Term Insurance - accurate answers-A type of term insurance with
a level premium and a death benefit that decreases each year, commonly used
for mortgage protection.
Return of Premium (ROP) - accurate answers-An increasing term insurance
policy that pays back the total premiums paid if the insured outlives the policy
term or dies within a specified time.
Premium - accurate answers-The amount paid for the insurance coverage,
which can vary based on the type of term insurance and the insured's age.
Face Amount - accurate answers-The death benefit amount specified in the
insurance policy.
,Level Premium - accurate answers-A premium that remains constant
throughout the term of the policy.
Convertible Policy - accurate answers-A policy that can be converted to a
different type of insurance without needing to provide proof of insurability.
Renewable Policy - accurate answers-A policy that can be renewed at the end
of its term without needing to provide proof of insurability.
Insurability - accurate answers-The ability of an individual to qualify for
insurance coverage based on health and other factors.
Mortgages - accurate answers-Loans secured by real estate, often insured with
decreasing term insurance to cover outstanding balances.
Beneficiary - accurate answers-The person or entity designated to receive the
death benefit from an insurance policy.
Health Status - accurate answers-The overall health condition of the insured,
which can affect insurance premiums and insurability.
30-Year Term Policy - accurate answers-A term life insurance policy that
provides coverage for 30 years.
Premium Increase - accurate answers-The rise in the cost of premiums,
typically associated with age or changes in risk factors.
Taxable Premiums - accurate answers-The amount of premiums returned that
are subject to taxation; ROP premiums returned are not taxable.
Low Risk Factor - accurate answers-The assessment of risk associated with
term insurance, which is generally lower than other types of insurance.
Coverage Expiration - accurate answers-The end of an insurance policy term,
after which the insured is no longer covered.
Pure Protection - accurate answers-Insurance that provides a death benefit
without any investment component or cash value.
, Premiums - accurate answers-The total amount paid by the insured for
insurance coverage, which in this case is $11,400 over 30 years.
Renewable Provision - accurate answers-Allows the policyowner the right to
renew the coverage at the expiration date without evidence of insurability.
Convertible Provision - accurate answers-Gives the policyowner the right to
convert the policy to a permanent insurance policy without evidence of
insurability.
Whole Life Insurance - accurate answers-A type of permanent life insurance
that provides lifetime protection and includes a savings element (cash value).
Cash Value - accurate answers-The amount created by the accumulation of
premium, scheduled to equal the face amount of the policy at age 100.
Living Benefits - accurate answers-Benefits allowing the policyowner to
borrow against the cash value or receive the cash value upon policy
surrender.
Ordinary Whole Life - accurate answers-Also known as straight life, it is the
basic whole life policy with premiums paid until the insured's death or age
100.
Limited-Pay Whole Life - accurate answers-A policy designed so that
premiums are completely paid-up well before age 100.
Single Premium Whole Life - accurate answers-A whole life policy where the
premium is paid in a single lump sum.
20-Pay Life - accurate answers-A limited-pay whole life policy where coverage
is completely paid for in 20 years.
Life Paid-Up at 65 (LP-65) - accurate answers-A limited-pay whole life policy
that is completely paid up by the insured's age 65.
Nonforfeiture Value - accurate answers-The cash value of a policy that does
not usually accumulate until the third policy year and grows tax deferred.
ACCURATE ANSWERS.
Term Insurance - accurate answers-Temporary protection that provides
coverage for a specific period of time, known as pure life insurance.
Death Benefit - accurate answers-The amount paid to the beneficiary if the
insured dies during the term of the policy.
Pure Death Protection - accurate answers-Coverage that pays the death
benefit only if the insured dies during the term; no cash value or living
benefits are provided.
Temporary Protection - accurate answers-Insurance coverage that is limited
to a specific period, as opposed to permanent protection.
Permanent Protection - accurate answers-Insurance coverage that lasts for
the insured's lifetime and may include a cash value component.
Level Term Insurance - accurate answers-A type of term insurance where the
death benefit does not change throughout the life of the policy.
Annually Renewable Term (ART) - accurate answers-A form of term insurance
with a level death benefit that is guaranteed to be renewable each year, but
with increasing premiums.
Decreasing Term Insurance - accurate answers-A type of term insurance with
a level premium and a death benefit that decreases each year, commonly used
for mortgage protection.
Return of Premium (ROP) - accurate answers-An increasing term insurance
policy that pays back the total premiums paid if the insured outlives the policy
term or dies within a specified time.
Premium - accurate answers-The amount paid for the insurance coverage,
which can vary based on the type of term insurance and the insured's age.
Face Amount - accurate answers-The death benefit amount specified in the
insurance policy.
,Level Premium - accurate answers-A premium that remains constant
throughout the term of the policy.
Convertible Policy - accurate answers-A policy that can be converted to a
different type of insurance without needing to provide proof of insurability.
Renewable Policy - accurate answers-A policy that can be renewed at the end
of its term without needing to provide proof of insurability.
Insurability - accurate answers-The ability of an individual to qualify for
insurance coverage based on health and other factors.
Mortgages - accurate answers-Loans secured by real estate, often insured with
decreasing term insurance to cover outstanding balances.
Beneficiary - accurate answers-The person or entity designated to receive the
death benefit from an insurance policy.
Health Status - accurate answers-The overall health condition of the insured,
which can affect insurance premiums and insurability.
30-Year Term Policy - accurate answers-A term life insurance policy that
provides coverage for 30 years.
Premium Increase - accurate answers-The rise in the cost of premiums,
typically associated with age or changes in risk factors.
Taxable Premiums - accurate answers-The amount of premiums returned that
are subject to taxation; ROP premiums returned are not taxable.
Low Risk Factor - accurate answers-The assessment of risk associated with
term insurance, which is generally lower than other types of insurance.
Coverage Expiration - accurate answers-The end of an insurance policy term,
after which the insured is no longer covered.
Pure Protection - accurate answers-Insurance that provides a death benefit
without any investment component or cash value.
, Premiums - accurate answers-The total amount paid by the insured for
insurance coverage, which in this case is $11,400 over 30 years.
Renewable Provision - accurate answers-Allows the policyowner the right to
renew the coverage at the expiration date without evidence of insurability.
Convertible Provision - accurate answers-Gives the policyowner the right to
convert the policy to a permanent insurance policy without evidence of
insurability.
Whole Life Insurance - accurate answers-A type of permanent life insurance
that provides lifetime protection and includes a savings element (cash value).
Cash Value - accurate answers-The amount created by the accumulation of
premium, scheduled to equal the face amount of the policy at age 100.
Living Benefits - accurate answers-Benefits allowing the policyowner to
borrow against the cash value or receive the cash value upon policy
surrender.
Ordinary Whole Life - accurate answers-Also known as straight life, it is the
basic whole life policy with premiums paid until the insured's death or age
100.
Limited-Pay Whole Life - accurate answers-A policy designed so that
premiums are completely paid-up well before age 100.
Single Premium Whole Life - accurate answers-A whole life policy where the
premium is paid in a single lump sum.
20-Pay Life - accurate answers-A limited-pay whole life policy where coverage
is completely paid for in 20 years.
Life Paid-Up at 65 (LP-65) - accurate answers-A limited-pay whole life policy
that is completely paid up by the insured's age 65.
Nonforfeiture Value - accurate answers-The cash value of a policy that does
not usually accumulate until the third policy year and grows tax deferred.
