2026 WASHINGTON LIFE HEALTH CORRECT
FINAL EXAM QUESTIONS AND ANSWERS SURE
A+
✔✔Cash dividend option - ✔✔The company sends you a check with the value of the
dividend. the company send the policy owner a check when the dividend is issued (on
the anniversary date) Law prohibits any guarantee on policy dividends. Almost
completely exclusive to whole-life policies
✔✔Reduced premium dividend option - ✔✔The dividend is used to payoff part or all of
the policies premium.
✔✔Paid-up life dividend option - ✔✔The dividend is used to reduce the total length of
time the own has to pay the whole life policy
✔✔Cash Value options - ✔✔Borrow against the cash value
Use the living trust
Surrender and terminate the policy
✔✔Non-forfeiture of cash value - ✔✔IF the policy is fore-fitted, the cash value is
returned to the insured NOT taken by the company
, ✔✔Non-forfeiture options - ✔✔Extended term insurance
Reduced-paid up insurance
Cash
✔✔Extended term insurance - ✔✔Uses the cash value to buy a term policy (same face
value as the canceled who life policy and extend coverage as long as the cash value
from the prior policy will allow). This is the default option.
✔✔Reduced paid-up insurance - ✔✔Exchanges the cash value for a "reduced paid-up
while life policy" The new policy will have a smaller death benefit, but no more
premiums. Basically, the cash is used to make a single premium payment to buy as
large a policy as possible given the insured's attained (current) age.
✔✔Cash - ✔✔Take the money and run. This nullifies the 3-year right of reinstatement
privilege
✔✔Reinstatement of lapsed policy - ✔✔Complete an application within 3 years
Payback the premiums with interest
repay loans with interest
provide proof of insurability
✔✔Cash settlement option - ✔✔Lump sum check (default method)
✔✔Annuity settlement option - ✔✔...
✔✔Interest settlement option - ✔✔Invests the money and earns interest
Policy owner can dictate when the beneficiary can gain access to the funds. Death
benefits are tax free, however the interest earned is taxable
✔✔Joint life policy - ✔✔Matures on first death
✔✔Survivorship policy - ✔✔Matures on last death
✔✔Family policy - ✔✔A collection of policies under on policy
✔✔Family income policy - ✔✔Whole life policy with a decreasing term rider all on the
bread winner.
✔✔Family maintenance policy - ✔✔Whole life combined with a level or decreasing term
✔✔Key employee insurance - ✔✔Life insurance on a key employee. Business owns the
policy and is the beneficiary. The insured only needs to sign to give permission to the
business.
FINAL EXAM QUESTIONS AND ANSWERS SURE
A+
✔✔Cash dividend option - ✔✔The company sends you a check with the value of the
dividend. the company send the policy owner a check when the dividend is issued (on
the anniversary date) Law prohibits any guarantee on policy dividends. Almost
completely exclusive to whole-life policies
✔✔Reduced premium dividend option - ✔✔The dividend is used to payoff part or all of
the policies premium.
✔✔Paid-up life dividend option - ✔✔The dividend is used to reduce the total length of
time the own has to pay the whole life policy
✔✔Cash Value options - ✔✔Borrow against the cash value
Use the living trust
Surrender and terminate the policy
✔✔Non-forfeiture of cash value - ✔✔IF the policy is fore-fitted, the cash value is
returned to the insured NOT taken by the company
, ✔✔Non-forfeiture options - ✔✔Extended term insurance
Reduced-paid up insurance
Cash
✔✔Extended term insurance - ✔✔Uses the cash value to buy a term policy (same face
value as the canceled who life policy and extend coverage as long as the cash value
from the prior policy will allow). This is the default option.
✔✔Reduced paid-up insurance - ✔✔Exchanges the cash value for a "reduced paid-up
while life policy" The new policy will have a smaller death benefit, but no more
premiums. Basically, the cash is used to make a single premium payment to buy as
large a policy as possible given the insured's attained (current) age.
✔✔Cash - ✔✔Take the money and run. This nullifies the 3-year right of reinstatement
privilege
✔✔Reinstatement of lapsed policy - ✔✔Complete an application within 3 years
Payback the premiums with interest
repay loans with interest
provide proof of insurability
✔✔Cash settlement option - ✔✔Lump sum check (default method)
✔✔Annuity settlement option - ✔✔...
✔✔Interest settlement option - ✔✔Invests the money and earns interest
Policy owner can dictate when the beneficiary can gain access to the funds. Death
benefits are tax free, however the interest earned is taxable
✔✔Joint life policy - ✔✔Matures on first death
✔✔Survivorship policy - ✔✔Matures on last death
✔✔Family policy - ✔✔A collection of policies under on policy
✔✔Family income policy - ✔✔Whole life policy with a decreasing term rider all on the
bread winner.
✔✔Family maintenance policy - ✔✔Whole life combined with a level or decreasing term
✔✔Key employee insurance - ✔✔Life insurance on a key employee. Business owns the
policy and is the beneficiary. The insured only needs to sign to give permission to the
business.
