LIFE INSURANCE EXAM ILLINOIS ACTUAL
QUESTIONS WITH VERIFIED SOLUTIONS
◉ Group life insurance.
Answer: Insurance written for members of a group, such as a place
of employment, association, or a union. Coverage is provided to the
members of that group under one master contract. The group is
underwritten as a whole, not on each individual member. One of the
benefits of group life coverage is usually there is no evidence of
insurability required.
◉ Term life insurance.
Answer: Life insurance that pays a death benefit if the policyholder
dies within a specific time period but has no remaining value at the
end of this time.
◉ Whole life insurance.
Answer: Sometimes called straight life insurance or ordinary life
insurance; can provide lifetime insurance coverage; in this case,
fixed premiums are paid for life; pays interest on the cash value
portion with a guaranteed minimum interest rate during life of the
contract.
◉ Joint survivor or last survivor life policies.
,Answer: Cover the lives of two individuals and saves on premium
costs by averaging the ages of the two insureds. Joint Life Survivor or
Last Survivor policies only pay the death benefit upon the death of
the last insured person. For example, say B and M purchase a joint
life survivor policy. If B were to die first and then M died 10 years
later, no benefits would be paid out from the policy until M died. A
Joint Life and Survivor policy covers two lives but only pays benefits
after the death of the last insured.
◉ Family maintenance policy.
Answer: Pays a monthly income from the date of death of the
insured to the end of the preselected period.
◉ Family income policy.
Answer: Combines Whole Life insurance with a Decreasing Term
Rider also written on the same person.
◉ Adjustable life policy.
Answer: Whole life insurance policy, but you can change your policy
as your needs change. You can change your premium payments to
increase or decrease coverage.
◉ Universal life insurance policy.
Answer: Incorporates flexible premiums and an adjustable death
benefit. The investment gains from a Universal Life Policy usually go
,toward the cash value. The policy owner can use the cash value to
manipulate the flexible aspects of a universal life insurance policy. A
customer who wants a policy that gives them the most options and
the most control would be looking for a Universal Life Policy.
Universal policies use gains to fund the cash value and give the
policy owner options for flexible premiums and adjustable death
benefits.
◉ Variable Life Insurance.
Answer: Life insurance in which the benefits are a function of the
returns being generated on the investments selected by the
policyholder.
◉ Equity index universal life insurance.
Answer: Combines most of the features, benefits, and security of
traditional life insurance with the potential of earned interest based
on the upward movement of an equity index.
◉ Cash value.
Answer: The equity amount or "savings" accumulation in a whole
life policy.
◉ Endowment policy.
, Answer: Is a contract providing for payment of the face amount at
the end of a fixed period, at a specified age of the insured, or at the
insured's death before the end of the stated period.
◉ Face amount plus cash value policy.
Answer: Contract that promises to pay at the insured's death the
face amount of the policy plus a sum equal to the policy's cash value.
◉ Juvenile Insurance.
Answer: Written on the lives of children who are within specified
age limits and generally under parental control.
◉ Non-medical life insurance.
Answer: Typically does not require a medical exam and tends to be
more expensive than medically underwritten policies. The insurer
will average out everyone's risk and charge accordingly. Although
insurers typically will not require a medical exam, they will still
inquire about the applicant's medical history and lifestyle.
◉ Target premium.
Answer: Is a suggested premium used in Universal Life policies. It
does not guarantee there will be adequate funds to maintain the
policy to any time, especially to life. It may give an indication of what
will be needed (under conservative estimates), to maintain the
policy.
QUESTIONS WITH VERIFIED SOLUTIONS
◉ Group life insurance.
Answer: Insurance written for members of a group, such as a place
of employment, association, or a union. Coverage is provided to the
members of that group under one master contract. The group is
underwritten as a whole, not on each individual member. One of the
benefits of group life coverage is usually there is no evidence of
insurability required.
◉ Term life insurance.
Answer: Life insurance that pays a death benefit if the policyholder
dies within a specific time period but has no remaining value at the
end of this time.
◉ Whole life insurance.
Answer: Sometimes called straight life insurance or ordinary life
insurance; can provide lifetime insurance coverage; in this case,
fixed premiums are paid for life; pays interest on the cash value
portion with a guaranteed minimum interest rate during life of the
contract.
◉ Joint survivor or last survivor life policies.
,Answer: Cover the lives of two individuals and saves on premium
costs by averaging the ages of the two insureds. Joint Life Survivor or
Last Survivor policies only pay the death benefit upon the death of
the last insured person. For example, say B and M purchase a joint
life survivor policy. If B were to die first and then M died 10 years
later, no benefits would be paid out from the policy until M died. A
Joint Life and Survivor policy covers two lives but only pays benefits
after the death of the last insured.
◉ Family maintenance policy.
Answer: Pays a monthly income from the date of death of the
insured to the end of the preselected period.
◉ Family income policy.
Answer: Combines Whole Life insurance with a Decreasing Term
Rider also written on the same person.
◉ Adjustable life policy.
Answer: Whole life insurance policy, but you can change your policy
as your needs change. You can change your premium payments to
increase or decrease coverage.
◉ Universal life insurance policy.
Answer: Incorporates flexible premiums and an adjustable death
benefit. The investment gains from a Universal Life Policy usually go
,toward the cash value. The policy owner can use the cash value to
manipulate the flexible aspects of a universal life insurance policy. A
customer who wants a policy that gives them the most options and
the most control would be looking for a Universal Life Policy.
Universal policies use gains to fund the cash value and give the
policy owner options for flexible premiums and adjustable death
benefits.
◉ Variable Life Insurance.
Answer: Life insurance in which the benefits are a function of the
returns being generated on the investments selected by the
policyholder.
◉ Equity index universal life insurance.
Answer: Combines most of the features, benefits, and security of
traditional life insurance with the potential of earned interest based
on the upward movement of an equity index.
◉ Cash value.
Answer: The equity amount or "savings" accumulation in a whole
life policy.
◉ Endowment policy.
, Answer: Is a contract providing for payment of the face amount at
the end of a fixed period, at a specified age of the insured, or at the
insured's death before the end of the stated period.
◉ Face amount plus cash value policy.
Answer: Contract that promises to pay at the insured's death the
face amount of the policy plus a sum equal to the policy's cash value.
◉ Juvenile Insurance.
Answer: Written on the lives of children who are within specified
age limits and generally under parental control.
◉ Non-medical life insurance.
Answer: Typically does not require a medical exam and tends to be
more expensive than medically underwritten policies. The insurer
will average out everyone's risk and charge accordingly. Although
insurers typically will not require a medical exam, they will still
inquire about the applicant's medical history and lifestyle.
◉ Target premium.
Answer: Is a suggested premium used in Universal Life policies. It
does not guarantee there will be adequate funds to maintain the
policy to any time, especially to life. It may give an indication of what
will be needed (under conservative estimates), to maintain the
policy.
