Chartered life underwriter (Type of Life Policies)2022/2023

Chartered life underwriter (Type of Life Policies)2022/2023All of the following are true about variable products EXCEPT A The cash value is not guaranteed. B Policyowners bear the investment risk. C The premiums are invested in the insurer's general account. D The minimum death benefit is guaranteed. The premiums are invested in the insurer's general account. Which of the following types of policies allows for a flexible premium and a variable investment component? A Guaranteed issue variable life insurance B Variable whole life insurance C Whole life insurance D Variable universal life insurance Variable universal life insurance 00:29 01:33 A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium? A If the father is disabled for at least a year B If the daughter is disabled for more than 3 months C If the daughter is disabled for any length of time D If the father is disabled for more than 6 months If the father is disabled for more than 6 months A domestic insurer issuing variable contracts must establish one or more A Annuity accounts. B General accounts. C Separate accounts. D Liability accounts. Separate accounts. Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? A Joint Life B Decreasing Term C Whole Life D Ordinary Life Joint Life When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy? A They can surrender the coverage for its cash value. B They can convert their coverage to permanent life insurance without evidence of insurability. C They can convert their coverage to permanent life insurance with evidence of insurability. D Family members are not provided any rights. They can convert their coverage to permanent life insurance without evidence of insurability. The following are features of the Indexed Universal Life EXCEPT A Adjustable death benefit. B Policy's cash value is dependent on the performance of the equity index. C Sale of this product requires a securities license. D Flexible premium. Sale of this product requires a securities license. All of the following statements are correct regarding credit life insurance EXCEPT A Benefits are paid to the borrower's beneficiary. B The amount of insurance permissible is limited per borrower. C Premiums are usually paid by the borrower. D Benefits are paid to the creditor. Benefits are paid to the borrower's beneficiary. The type of insurance sold to a debtor and designed to pay the amount due on a loan if the debtor dies before the loan is repaid is called A Decreasing whole life. B Multiple Protection insurance. C Credit life. D Credit health. Credit life. Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? A Jumping Juvenile B Juvenile Premium Provision C Waiver of Premium D Payor Benefit Payor Benefit All of the following entities regulate variable life policies EXCEPT A The Insurance Department. B The Guaranty Association. C Federal government. D The SEC. The Guaranty Association. What kind of policy issues certificates of insurance to insureds? A Nonqualified annuity B Any insurance C Group insurance D Individual insurance Group insurance 00:02 01:33 Which of the following is a key distinction between variable whole life and variable universal life products? A Variable whole life allows policy loans from the cash value. B Variable universal life has a fixed premium. C Variable whole life has a guaranteed death benefit. D Variable universal life is regulated solely through FINRA. Variable whole life has a guaranteed death benefit. To sell variable life insurance policies, an agent must receive all of the following EXCEPT A A securities license. B A life insurance license. C SEC registration. D FINRA registration. SEC registration. A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? A The insured's premiums will be waived until she is 21. B The premiums will become tax deductible until the insured's 18th birthday. C Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected. D The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums. The insured's premiums will be waived until she is 21. An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called A Single premium whole life. B Modified Endowment Contract (MEC). C Level term life. D Graded premium whole life. Single premium whole life. Which of the following determines the cash value of a variable life policy? A The company's general account B The policy's guarantees. C The premium mode D The performance of the policy portfolio The performance of the policy portfolio Which of the following would be the beneficiary in credit life insurance? A Borrower B Creditor C Insured D Company Creditor A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? A Survivorship Life Policy B Second-to-Die C Family Income Policy D Joint Life Policy Joint Life Policy When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy? A They can convert their coverage to permanent life insurance without evidence of insurability. B They can convert their coverage to permanent life insurance with evidence of insurability. C Family members are not provided any rights. D They can surrender the coverage for its cash value. They can convert their coverage to permanent life insurance without evidence of insurability. A Return of Premium term life policy is written as what type of term coverage? A Decreasing B Renewable C Level D Increasing Increasing An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? A Variable life B Universal life C Whole life D Decreasing term Decreasing term Which of the following riders would NOT cause the Death Benefit to increase? A Accidental Death Rider B Payor Benefit Rider C Guaranteed Insurability Rider D Cost of Living Rider Payor Benefit Rider An insured and his spouse own a home. When the insured dies, the insurer pays the remaining balance on his home loan. Which type of life insurance provision/rider does this describe? A Accidental Death and Dismemberment B Family Term C Mortgage Redemption D Payor Benefit Mortgage Redemption An insured purchased a variable life insurance policy with a face amount of $50,000. Over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out? A $10,000 B $40,000 C $50,000 D $60,000 $50,000 Which Universal Life option has a gradually increasing cash value and a level death benefit? A Juvenile life B Term insurance C Option B D Option A Option A If an agent wishes to sell variable life policies, what license must the agent obtain? A Adjuster B Surplus Lines C Personal Lines D Securities Securities For variable products, underlying assets must be kept in A A revenue account. B A money market account. C A general account. D A separate account. A separate account. Which of the following is NOT allowed in credit life insurance? A Creditor having a collateral assignment on the policy B Creditor requiring that a debtor has a life insurance C Creditor becoming a policy beneficiary D Creditor requiring that a debtor buys insurance from a certain insurer Creditor requiring that a debtor buys insurance from a certain insurer Which policy component decreases in decreasing term insurance? A Dividend B Premium C Face amount D Cash value Face amount A young father would like a life insurance policy to provide coverage for all five family members at the lowest cost. Which type of policy would he most likely buy? A Family Protection Policy B Universal Life Policy C Family Income Policy D Level Term Policy Family Protection Policy Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? A Equity Indexed Universal Life B Variable Universal Life C Universal Life - Option A D Universal Life - Option B Universal Life - Option A Which of the following is correct regarding credit life insurance? A It insures the life of a creditor. B It has a maximum term of 20 years. C It insures the life of a debtor. D It is purchased on an installment basis. It insures the life of a debtor. Which of the following life insurance policies allows a policyowner to take out a loan from the policy's cash value? A Decreasing term life B Variable universal life C Increasing term life D Credit term life Variable universal life Which of the following types of insurance policies is most commonly used in credit life insurance? A Increasing term B Whole life C Equity indexed life D Decreasing term Decreasing term Which of the following is TRUE regarding the insurance amount in a credit life policy? A The amount of coverage can be greater than the amount owed. B The creditor can only insure the debtor for the amount owed. C The creditor may insure the debtor for an unlimited amount of coverage. D Allowable amount of coverage is determined by the State Insurance Commissioner. The creditor can only insure the debtor for the amount owed. An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term? A The insured may renew the policy for another 10 years at the same premium rate. B The insured may renew the policy for another 10 years, but at a higher premium rate. C The insured must provide evidence of insurability to renew the policy. D The insured may only convert the policy to another term policy. The insured may renew the policy for another 10 years, but at a higher premium rate. What type of insurance would be used for a Return of Premium rider? A Annually Renewable Term B Increasing Term C Level Term D Decreasing Term Increasing Term Which of the following is called a "second-to-die" policy? A Survivorship life B Family income C Juvenile life D Joint life Survivorship life A Straight Life policy has what type of premium? A An increasing annual premium for the life of the insured B A decreasing annual premium for the life of the insured C A variable annual premium for the life of the insured D A level annual premium for the life of the insured A level annual premium for the life of the insured The premium of a survivorship life policy compared with that of a joint life policy would be A As high. B Half the amount. C Lower. D Higher. Lower. Concerning Juvenile Life insurance, which of the following statements is INCORRECT? A Usually a parent or guardian is the applicant for insurance on the life of a minor. B It can be a limited premium payment policy. C Juvenile Life is classified as any life insurance written on the life of a minor. D Juvenile Life is classified as any life insurance purchased by a minor. Juvenile Life is classified as any life insurance purchased by a minor. Which of the following types of insurance covers the whole family in a single contract? A Family Income Policy B Survivorship Policy C Whole Life Policy D Family Policy Family Policy If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this? A Single premium policy B Jumping juvenile policy C Limited pay whole life policy D Modified life insurance policy Jumping juvenile policy Which type of life insurance policy generates immediate cash value? A Single Premium B Level Term C Decreasing Term D Continuous Premium Single Premium The death benefit under the Universal Life Option B A Decreases by the amount that the cash value increases. B Increases for the first few years of the policy, and then levels off. C Remains level. D Gradually increases each year by the amount that the cash value increases. Gradually increases each year by the amount that the cash value increases.