FPQP module 5. Questions and Answers

FPQP module 5

Group Term Life Insurance - answer Form of insurance carried by employers for their
employees that provides a lump-sum payment to the employees' beneficiaries. Most
common. Stops at termination
no evidence of insurability required
up to $50,000 of coverage: no income taxation for the employee

Whole Life Insurance - answerCommon type of permanent life insurance coverage.
savings element (cash value)
higher premiums than term at any given age
cash value accumulation
tax deferral
dividends (w/ participating policies)
can borrow against cash value

Variable whole life - answersimilar to fixed whole life.
offers investment options "Sub-accounts" for the policies cash value
fixed premium
fixed face amount of coverage
cash value varies since invested in stocks/bonds

Universal Life Insurance - answerFlexible premiums
flexible death benefits
flexibility "unbundled":
-premium
-face amount of coverage
-cash value
Fluctuating interest rate:
-danger of lapsing
-potential benefit of higher cash value

Variable Universal Life - answerSimilar to universal life insurance
offers investment options "sub-accounts" for policys cash value
premium varies
face amount of coverage can vary
cash value varies since invested in stocks/bonds

Standard Provisions of Life Insurance Policy - answerSuicide Clause
Grace Period
Incontestable Clause
Reinstatement Period