Types of Policies/Ucanpass UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Term Insurance - CORRECT ANSWER - Life insurance coverage for a specified period
of time. Pure life insurance. Greatest amount of coverage for the lowest premium.
Pure death protection - CORRECT ANSWER - Term Insurance. No cash value of other
living benefits
Types of term insurance (4) - CORRECT ANSWER - Level, Increasing, Decreasing.
Based on how the death benefit (face amount) changes during the policy term. Premium is level
throughout the policy.
Level Term Insurance - CORRECT ANSWER - The death benefit does not change during
the life of the policy
Annually Renewable Term (ART) - CORRECT ANSWER - Purest form of term
insurance. Death benefit remains level, may be guaranteed to be renewable each year without
proof of of insurability. Premium increases according to the attained age.
Decreasing Term - CORRECT ANSWER - Level premium
Death benefit that decreases each year over the duration of the policy term.
Commonly purchased to insure the payment of a mortgage or other debts if the insured dies
prematurely.
Is usually convertible but not renewable
Increasing Term - CORRECT ANSWER - Term insurance that provides an increasing face
amount with level premiums.
Refund of premiums
, Ideal to handle inflation or cost of living increases
renewable term - CORRECT ANSWER - The provision allows the policyowner the right
to renew the coverage at the expiration date without evidence of insurability. New term policy
will be based on insured's current age
Permanent Life Insurance - CORRECT ANSWER - Policies that build cash value
Remain in effect for the entire life of the insured (age 100) as long as premium is paid
Whole Life Insurance - CORRECT ANSWER - Provides life time protection
Includes a savings element (or cash value)
Premiums are usually higher than term insurance
Whole life insurance key characteristics - CORRECT ANSWER - Level Premium
Level death benefit
Cash value
Living benefits
Cash Value - CORRECT ANSWER - Created by the accumulation of premium; is
scheduled to equal the face amount of the policy when the insured reaches 100
Are credited to the policy on a regular basis
Have guaranteed interest rates
Living Benefits - CORRECT ANSWER - Policy owner can borrow again the cash value
OR
Can receive the cash value when the policy is surrendered
Also called nonforfeiture value
3 Types of Whole Life Insurance - CORRECT ANSWER - Straight Whole Life
ACTUAL Exam Questions and CORRECT
Answers
Term Insurance - CORRECT ANSWER - Life insurance coverage for a specified period
of time. Pure life insurance. Greatest amount of coverage for the lowest premium.
Pure death protection - CORRECT ANSWER - Term Insurance. No cash value of other
living benefits
Types of term insurance (4) - CORRECT ANSWER - Level, Increasing, Decreasing.
Based on how the death benefit (face amount) changes during the policy term. Premium is level
throughout the policy.
Level Term Insurance - CORRECT ANSWER - The death benefit does not change during
the life of the policy
Annually Renewable Term (ART) - CORRECT ANSWER - Purest form of term
insurance. Death benefit remains level, may be guaranteed to be renewable each year without
proof of of insurability. Premium increases according to the attained age.
Decreasing Term - CORRECT ANSWER - Level premium
Death benefit that decreases each year over the duration of the policy term.
Commonly purchased to insure the payment of a mortgage or other debts if the insured dies
prematurely.
Is usually convertible but not renewable
Increasing Term - CORRECT ANSWER - Term insurance that provides an increasing face
amount with level premiums.
Refund of premiums
, Ideal to handle inflation or cost of living increases
renewable term - CORRECT ANSWER - The provision allows the policyowner the right
to renew the coverage at the expiration date without evidence of insurability. New term policy
will be based on insured's current age
Permanent Life Insurance - CORRECT ANSWER - Policies that build cash value
Remain in effect for the entire life of the insured (age 100) as long as premium is paid
Whole Life Insurance - CORRECT ANSWER - Provides life time protection
Includes a savings element (or cash value)
Premiums are usually higher than term insurance
Whole life insurance key characteristics - CORRECT ANSWER - Level Premium
Level death benefit
Cash value
Living benefits
Cash Value - CORRECT ANSWER - Created by the accumulation of premium; is
scheduled to equal the face amount of the policy when the insured reaches 100
Are credited to the policy on a regular basis
Have guaranteed interest rates
Living Benefits - CORRECT ANSWER - Policy owner can borrow again the cash value
OR
Can receive the cash value when the policy is surrendered
Also called nonforfeiture value
3 Types of Whole Life Insurance - CORRECT ANSWER - Straight Whole Life
