Exam FX Chapter 2 Quizzes |96 Q’s and
A’s
A man purchased a $90,000 annuity with a single premium, and began
receiving payments 2 months after that. What type of annuity is it? - -With
an immediate annuity, distribution starts within 1 year of purchase.
- If the owner of a whole life policy who is also the insured dies at age 80,
and there are no outstanding loans on the policy, what portion of the death
benefit will be paid to the beneficiary? - -Whole life insurance policies
guarantee the death benefit. If the insured lives to the age of 100, the
insurance company pay the owner the face amount (equal the cash value).
However, if the insured dies prior to the policy maturity date, the death
benefit is paid to the beneficiary.
- Whole life policies offer - -Policy loans. level premium based on the issue
age, guaranteed, level death benefit, cash value that is scheduled to equal
the face amount at the insured's age 100, and living benefits, which include
policy loans.
- Straight Life policies charge - -a level annual premium throughout the
insured's lifetime and provide a level, guaranteed death benefit.
- Which policy component decreases in decreasing term insurance? - -Face
amount. Decreasing term policies feature a level premium and a death
benefit that decreases each year over the duration of the policy term.
- The main difference between immediate and deferred annuities is - -when
the income payments begin. Immediate annuities will begin payments within
the first year, while deferred annuities will not begin payments until
sometime after the first year.
- Limited Pay Whole Life premiums are - -all paid by the time the insured
reaches age 65. The policy endows when the insured turns 100. It is the
premium paying period that is limited, not the maturity.
- A Joint Life policy - -covering two lives would be the least expensive
because the premiums are based on an average age, and it would pay a
death benefit only at the first death.
- The policyowner has the flexibility to increase the amount of premium
going into the policy and to later decrease it again. In fact, the policyowner
may even skip paying a premium and the policy will not lapse as long as
, there is sufficient cash value at the time to compensate for the nonpayment
of premium. - -Universal life
- If a level term product is renewed at the end of the term period - -the
premium will be based upon the attained age of the insured.
- Under Option B the death benefit includes - -the annual increase in cash
value so that the death benefit gradually increases each year by the amount
that the cash value increases.
- The equity in an equity index annuity is linked to - -An index like Standard
& Poor's 500.
- During partial withdrawal from a universal life policy, which portion will be
taxed? - -Interest. During the withdrawal, the interest earned on the
withdrawn cash value may be subject to taxation.
- The "annuitization period" is the time during which accumulated money is -
-converted into an income stream. It is also referred to as the annuity,
liquidation or pay-out period.
- Under Option A, the death benefit - -remains level while the cash value
gradually increases. The death benefit will increase at a later date in order to
maintain a gap between the cash value and the death benefit before the
policy matures.
- An agent selling variable annuities must be registered with - -FINRA.
Because variable annuities are considered to be securities, a person must be
registered with the FINRA (formerly NASD) and hold a securities license in
addition to a life agent's license in order to sell variable annuities.
- Which of the following determines the cash value of a variable life policy? -
-The performance of the policy portfolio
- Whole life policies are referred to as - -permanent protection, since as long
as the premium is paid coverage will continue for the life of the insured. Both
the premiums and death benefit are guaranteed and will remain level for life.
- The annuity period is the - -time during which accumulated money is
converted into an income stream
- The annuitant receives payments from an annuity and is the person whose
- -life expectancy is considered when writing the contract. The annuitant and
annuity owner are often the same person but do not have to be.
A’s
A man purchased a $90,000 annuity with a single premium, and began
receiving payments 2 months after that. What type of annuity is it? - -With
an immediate annuity, distribution starts within 1 year of purchase.
- If the owner of a whole life policy who is also the insured dies at age 80,
and there are no outstanding loans on the policy, what portion of the death
benefit will be paid to the beneficiary? - -Whole life insurance policies
guarantee the death benefit. If the insured lives to the age of 100, the
insurance company pay the owner the face amount (equal the cash value).
However, if the insured dies prior to the policy maturity date, the death
benefit is paid to the beneficiary.
- Whole life policies offer - -Policy loans. level premium based on the issue
age, guaranteed, level death benefit, cash value that is scheduled to equal
the face amount at the insured's age 100, and living benefits, which include
policy loans.
- Straight Life policies charge - -a level annual premium throughout the
insured's lifetime and provide a level, guaranteed death benefit.
- Which policy component decreases in decreasing term insurance? - -Face
amount. Decreasing term policies feature a level premium and a death
benefit that decreases each year over the duration of the policy term.
- The main difference between immediate and deferred annuities is - -when
the income payments begin. Immediate annuities will begin payments within
the first year, while deferred annuities will not begin payments until
sometime after the first year.
- Limited Pay Whole Life premiums are - -all paid by the time the insured
reaches age 65. The policy endows when the insured turns 100. It is the
premium paying period that is limited, not the maturity.
- A Joint Life policy - -covering two lives would be the least expensive
because the premiums are based on an average age, and it would pay a
death benefit only at the first death.
- The policyowner has the flexibility to increase the amount of premium
going into the policy and to later decrease it again. In fact, the policyowner
may even skip paying a premium and the policy will not lapse as long as
, there is sufficient cash value at the time to compensate for the nonpayment
of premium. - -Universal life
- If a level term product is renewed at the end of the term period - -the
premium will be based upon the attained age of the insured.
- Under Option B the death benefit includes - -the annual increase in cash
value so that the death benefit gradually increases each year by the amount
that the cash value increases.
- The equity in an equity index annuity is linked to - -An index like Standard
& Poor's 500.
- During partial withdrawal from a universal life policy, which portion will be
taxed? - -Interest. During the withdrawal, the interest earned on the
withdrawn cash value may be subject to taxation.
- The "annuitization period" is the time during which accumulated money is -
-converted into an income stream. It is also referred to as the annuity,
liquidation or pay-out period.
- Under Option A, the death benefit - -remains level while the cash value
gradually increases. The death benefit will increase at a later date in order to
maintain a gap between the cash value and the death benefit before the
policy matures.
- An agent selling variable annuities must be registered with - -FINRA.
Because variable annuities are considered to be securities, a person must be
registered with the FINRA (formerly NASD) and hold a securities license in
addition to a life agent's license in order to sell variable annuities.
- Which of the following determines the cash value of a variable life policy? -
-The performance of the policy portfolio
- Whole life policies are referred to as - -permanent protection, since as long
as the premium is paid coverage will continue for the life of the insured. Both
the premiums and death benefit are guaranteed and will remain level for life.
- The annuity period is the - -time during which accumulated money is
converted into an income stream
- The annuitant receives payments from an annuity and is the person whose
- -life expectancy is considered when writing the contract. The annuitant and
annuity owner are often the same person but do not have to be.
