Chapter four exam 1 type of insurance
policies xcel UPDATED Exam Questions
and CORRECT Answers
P is looking to purchase a life insurance policy that will pay a stated monthly income to his
beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year
period. What type of policy should P purchase? - CORRECT ANSWER - Family
Maintenance Policy
Life insurance that covers an insureds Whole life with level premiums paid over a limited time is
called - CORRECT ANSWER - Limited pay whole life
Which is true concerning a variable universal life policy - CORRECT ANSWER - Policy
owner Controls where the investment will go and selects the amount of the premium payment
Which of these life product is not considered interest-sensitive - CORRECT ANSWER -
Modified whole life
S is covered by a whole life policy. Which insurance product can cover his children? -
CORRECT ANSWER - Child term rider
All of these are characteristics of an adjustable life policy except - CORRECT ANSWER -
face amount can be adjusted using policy dividends
What advantage does an equity indexed insurance policy have over a variable life policy -
CORRECT ANSWER - A minimum guaranteed rate of return
What kind of life insurance product covers children they are parents policy - CORRECT
ANSWER - A term rider
, What kind of life insurance offers the policy owner a cash value that is invested in a separate
account - CORRECT ANSWER - Variable life
Universal life insurance offers which of these features - CORRECT ANSWER - Flexible
premium and flexible face amount
A father who dies in three years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waved under which provision - CORRECT ANSWER - Pay
or provision
What kind of insurance policy supplies an income stream over a set period of time that starts
when the insured dies? - CORRECT ANSWER - Family Maintenance Policy
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases
in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of
policy is this? - CORRECT ANSWER - Modified Whole Life
A 15-year mortgage is best protected by what kind of life policy? - CORRECT ANSWER -
15-year decreasing term
A life insurance policy that fails the 7-pay test is considered to be a modified endowment
contract. This type of policy will. - CORRECT ANSWER - Lose certain tax advantages
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be correct? - CORRECT ANSWER - 20-Pay Life accumulates cash value
faster than Straight Life
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed? - CORRECT
ANSWER - Level term
policies xcel UPDATED Exam Questions
and CORRECT Answers
P is looking to purchase a life insurance policy that will pay a stated monthly income to his
beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year
period. What type of policy should P purchase? - CORRECT ANSWER - Family
Maintenance Policy
Life insurance that covers an insureds Whole life with level premiums paid over a limited time is
called - CORRECT ANSWER - Limited pay whole life
Which is true concerning a variable universal life policy - CORRECT ANSWER - Policy
owner Controls where the investment will go and selects the amount of the premium payment
Which of these life product is not considered interest-sensitive - CORRECT ANSWER -
Modified whole life
S is covered by a whole life policy. Which insurance product can cover his children? -
CORRECT ANSWER - Child term rider
All of these are characteristics of an adjustable life policy except - CORRECT ANSWER -
face amount can be adjusted using policy dividends
What advantage does an equity indexed insurance policy have over a variable life policy -
CORRECT ANSWER - A minimum guaranteed rate of return
What kind of life insurance product covers children they are parents policy - CORRECT
ANSWER - A term rider
, What kind of life insurance offers the policy owner a cash value that is invested in a separate
account - CORRECT ANSWER - Variable life
Universal life insurance offers which of these features - CORRECT ANSWER - Flexible
premium and flexible face amount
A father who dies in three years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waved under which provision - CORRECT ANSWER - Pay
or provision
What kind of insurance policy supplies an income stream over a set period of time that starts
when the insured dies? - CORRECT ANSWER - Family Maintenance Policy
K buys a policy where the premium stays fixed for the first 5 years. The premium then increases
in year 6 and stays level thereafter, all the while the death benefit remains the same. What kind of
policy is this? - CORRECT ANSWER - Modified Whole Life
A 15-year mortgage is best protected by what kind of life policy? - CORRECT ANSWER -
15-year decreasing term
A life insurance policy that fails the 7-pay test is considered to be a modified endowment
contract. This type of policy will. - CORRECT ANSWER - Lose certain tax advantages
A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash
value at a faster rate in the early years of the policy. Which of these statements made by the
producer would be correct? - CORRECT ANSWER - 20-Pay Life accumulates cash value
faster than Straight Life
D needs life insurance that provides coverage for only a limited amount of time while also
paying the lowest possible premium. What kind of policy is needed? - CORRECT
ANSWER - Level term
