NC Life insurance state exam study guideline with complete solutions

NC Life insurance state exam study guideline with complete solutions Term Insurance - Answer- Used for Temporary Situations. Net cost highest in the long run. Premiums goes up every year based on current (attained)age. Term Insurance - Answer- Expire's at a certain age/Time in the future. May be renewable up to a certain age or date with out a phyical Exam. Level Term Insurance - Answer- Term insurance can be Renewed annually. Has a level Face Amount at renewal, Premiums goes up. Can be purchased for a Year or as often as 5, 10, 15, to 20 years inclements with average premium. Premiums and Face Amounts are "Level" for a period of "Time". Decreasing Term Insurance - Answer- It is NOT Annual Renewable term. Face Amount goes down, while Premiums remain the same. Decreasing Term insurance is often used as a mortage redemption. Can be converted to Whole Life, regardless of health. Premiums stays the same. Costs increases as Face Amount decreases, by expiration the Face Amount is Zero. Increasing Term Insurance - Answer- Term is added as a rider to Whole Life policies, at an extra cost. Face Amount goes up. It Allows beneficiary to recieve Face Amount plus Premiums or Cash Value. Renewability - Answer- Most Term Is renewable up to a certain age regardless of health. That can be renewed without proof of the insureds insurability, up to a certain specified maximum age. Convertibilty - Answer- Most are convertible to Whole Life policies regardless of health. Conversions are based on current "attained" age. NOT original age. Conversion may only be to a move expensive policy, such as Whole Life. Term insurance - Answer- You can not convert "Term to Term" You can convert "Term to Whole Life" You can never convert to more coverage than you have. " If you want more insurance, you will have to pass a physical exam and pay premiums upon your current "attained" age. What are the 9 types of Whole Life Insurance Policies? - Answer- "Ordinary (Straight) Life" " Limited Pay" " Single-Premiums Whole Life" "Adjustable Whole Life" Universal Whole Life" Variable Whole Life" "Variable/Universal Whole Life" "Interest Sensitive Whole Life" " Equity-indexed Life "Ordinary (Straight) Life" (Fixed Premiums) - Answer- Permanent protection (matures at age 100) Guaranteed Tax deferred Interest rate on Cash Value. Cash Value builds slowly for the first 3 years. Premiums are level, since the company risks goes down as Cash Value goes up. If you die the insurer keeps the Cash Value to offset their risks. Insureds has access to Cash through Cash Surrender or a policy loan. "Rates are per unit of protection" ($1,000 is 1 unit) C/V is guaranteed to be a certain amount per $1,000 (in the future). C/V will equal F/A at policy maturity (age 100). Limited Pay and Single premium Whole Life (Fixed Premiums) - Answer- Limited Pay can also be as LP65 or 20pay life 30 paylife, so don't get these confussed, they are the same thing. Premium paying period is shorter. Still matures at age 100 (Not end of premium paying period) Client pays same amount of money over a shorter period of time. The shorter the premium paying period, the higher the premium. C/v builds faster than Oridary WL. A single-premium policy will have an Immediate C/V. Limited-pay Whole Life - Answer- A 20 paylife will be paid up in 20 years If purchased at age 30, paid up at age 50. The premium is paid up, your still covered till the policy matures at age 100. A life paid up at age 65, will be paid up at age 65 (LP65) If purchased at age 30, paid up at age 65. The premium is paid up at age 65, your still covered until policy matures at age 100. Adjustable Whole life ( Flexible Premium) - Answer- Is a combination of Term and Whole Life! Still cover you until you die or age 100 (matures) Insureds c