Life Insurance Exam (Pearson VUE)
Ordinary Whole life (I Types of Policies, A. Traditional whole life products) - ANS--
Insurance protection to age 100
- Cash value accumulation to age 100
- Fixed level premium payments
Limited Payment (I Types of Policies, A. Traditional whole life products) - ANS-Premium
payments are for a specified time (20-Pay Life or 30-Pay Life) or to a specified age (Life
Paid up at 65). The face amount (death benefit) remains level and cash value continues
to earn interest and mature at age 100. While the annual premium is higher than
Straight Life, it is paid for a shorter period of time and will have a lower total premium
outlay.
Single Premium (I Types of Policies, A. Traditional whole life products) - ANS-The entire
premium is paid in a lump sum at the time of purchase and creates immediate cash
value. The face amount (death benefit) remains level and cash value continues to earn
interest and mature at age 100. This policy has the lowest total premium outlay for the
life of the policy.
Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable life products) -
ANS-- insurance protection and a savings element (cash value) that grows on a
tax-deferred basis
-unbundled policy, individual elements of the policy and premium(morality risk, policy
expenses, and the cash value) are credited to the account separately after the premium
is paid
- Built in guarantees regarding the cost of insurance (morality risk) and the interest rates
applied to cash values
Variable Whole Life (I Types of Policies, B. Interest/market-sensitive/adjustable life
products) - ANS-- a whole life policy with certain benefits that will vary based on market
conditions.
- characteristics include fixed premium, accounts, general account (Guaranteed values),
and separate account (non guaranteed values)
Variable Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable life
products) - ANS-Provides for flexible premiums and adjustable death benefits
Ordinary Whole life (I Types of Policies, A. Traditional whole life products) - ANS--
Insurance protection to age 100
- Cash value accumulation to age 100
- Fixed level premium payments
Limited Payment (I Types of Policies, A. Traditional whole life products) - ANS-Premium
payments are for a specified time (20-Pay Life or 30-Pay Life) or to a specified age (Life
Paid up at 65). The face amount (death benefit) remains level and cash value continues
to earn interest and mature at age 100. While the annual premium is higher than
Straight Life, it is paid for a shorter period of time and will have a lower total premium
outlay.
Single Premium (I Types of Policies, A. Traditional whole life products) - ANS-The entire
premium is paid in a lump sum at the time of purchase and creates immediate cash
value. The face amount (death benefit) remains level and cash value continues to earn
interest and mature at age 100. This policy has the lowest total premium outlay for the
life of the policy.
Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable life products) -
ANS-- insurance protection and a savings element (cash value) that grows on a
tax-deferred basis
-unbundled policy, individual elements of the policy and premium(morality risk, policy
expenses, and the cash value) are credited to the account separately after the premium
is paid
- Built in guarantees regarding the cost of insurance (morality risk) and the interest rates
applied to cash values
Variable Whole Life (I Types of Policies, B. Interest/market-sensitive/adjustable life
products) - ANS-- a whole life policy with certain benefits that will vary based on market
conditions.
- characteristics include fixed premium, accounts, general account (Guaranteed values),
and separate account (non guaranteed values)
Variable Universal Life (I Types of Policies, B. Interest/market-sensitive/adjustable life
products) - ANS-Provides for flexible premiums and adjustable death benefits
