TN Life and Health Insurance Exam/ 215
Quizzes & Correct Answers.
limited pay - Answer: premium is paid up before age 100; higher premium and higher cash
value
single pay - Answer: premium is paid up in one payment
20 Pay Life - Answer: premium is paid up in 20 yrs
Life Paid Up at 65 - Answer: premium paid up at age 65
modified whole life - Answer: premium begins very low (term) and changes to whole life with
one raise in premium after 3-5 years then premium is constant for life of policy
graded premium whole life - Answer: premium begins very low (term) and raises each year for
5-10 years then premium is constant for life of policy
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,endowment - Answer: policy matures before age 100 at a specific age or date; higher premium
and cash value
pure endowment - Answer: endowment that will pay off only if the insured lives to maturity
adjustable life insurance - Answer: allows the insured to adjust the premium, face amount, and
term
universal life insurance - Answer: policy where most all of the premium is invested in a cash
value account earning competitive current interest rates and the rest of the premium buys term
for the face amount needed
variable life insurance - Answer: insurance company invests premium in stock market; hedge
against inflation
scheduled premium variable life - Answer: the amount being paid and the dates of payment are
known; minimum death payment; can borrow 75-90% of cash value
flexible premium variable life - Answer: the amount of premium to be paid and the payment
date are both unknown; no guaranteed cash value/death benefit; owner cannot borrow on this
policy
variable universal life insurance - Answer: the insured directs the insurance company exactly
where to invest their premiums; requires a lot of investing experience
interest-sensitive whole life insurance - Answer: premium and cash value amounts may change
based on insurer's experience; minimum guaranteed rate of return and minimum cash values
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, annuity - Answer: designed to liquidate a sum of money; guarantees a lifetime income to the
recipient
fixed annuity - Answer: annuity that guarantees the principal, interest, and the amount of the
payment
variable annuity - Answer: premium is invested in stocks, so the annuity is not fully guaranteed
equity index annuity - Answer: annuity that provides higher interest while protecting principal
immediate annuity payment - Answer: payments start within a year
deferred annuity payment - Answer: payment starts later than a year or more
level premium payment - Answer: same payments over a period of time to fund annuity
flexible premium payment - Answer: annuity payment frequency and amount are flexible
single premium payment - Answer: annuity payment that is one lump sum payment
family income policy - Answer: whole life and decreasing term on the bread winner provided to
surviving family
family maintenance policy - Answer: whole life and level term on the income benefits on the
bread winner provided to surviving family
family policy - Answer: coverage on all members of the family that gives bread winner whole
life, spouse term up to 65, and children term up to 18
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Quizzes & Correct Answers.
limited pay - Answer: premium is paid up before age 100; higher premium and higher cash
value
single pay - Answer: premium is paid up in one payment
20 Pay Life - Answer: premium is paid up in 20 yrs
Life Paid Up at 65 - Answer: premium paid up at age 65
modified whole life - Answer: premium begins very low (term) and changes to whole life with
one raise in premium after 3-5 years then premium is constant for life of policy
graded premium whole life - Answer: premium begins very low (term) and raises each year for
5-10 years then premium is constant for life of policy
Page 1 of 21
,endowment - Answer: policy matures before age 100 at a specific age or date; higher premium
and cash value
pure endowment - Answer: endowment that will pay off only if the insured lives to maturity
adjustable life insurance - Answer: allows the insured to adjust the premium, face amount, and
term
universal life insurance - Answer: policy where most all of the premium is invested in a cash
value account earning competitive current interest rates and the rest of the premium buys term
for the face amount needed
variable life insurance - Answer: insurance company invests premium in stock market; hedge
against inflation
scheduled premium variable life - Answer: the amount being paid and the dates of payment are
known; minimum death payment; can borrow 75-90% of cash value
flexible premium variable life - Answer: the amount of premium to be paid and the payment
date are both unknown; no guaranteed cash value/death benefit; owner cannot borrow on this
policy
variable universal life insurance - Answer: the insured directs the insurance company exactly
where to invest their premiums; requires a lot of investing experience
interest-sensitive whole life insurance - Answer: premium and cash value amounts may change
based on insurer's experience; minimum guaranteed rate of return and minimum cash values
Page 2 of 21
, annuity - Answer: designed to liquidate a sum of money; guarantees a lifetime income to the
recipient
fixed annuity - Answer: annuity that guarantees the principal, interest, and the amount of the
payment
variable annuity - Answer: premium is invested in stocks, so the annuity is not fully guaranteed
equity index annuity - Answer: annuity that provides higher interest while protecting principal
immediate annuity payment - Answer: payments start within a year
deferred annuity payment - Answer: payment starts later than a year or more
level premium payment - Answer: same payments over a period of time to fund annuity
flexible premium payment - Answer: annuity payment frequency and amount are flexible
single premium payment - Answer: annuity payment that is one lump sum payment
family income policy - Answer: whole life and decreasing term on the bread winner provided to
surviving family
family maintenance policy - Answer: whole life and level term on the income benefits on the
bread winner provided to surviving family
family policy - Answer: coverage on all members of the family that gives bread winner whole
life, spouse term up to 65, and children term up to 18
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