NEVADA LIFE AND HEALTH EVALUATION TEST
QUESTIONS AND ANSWERS SURE A+
✔✔limited-pay whole life - ✔✔designed so that premiums for coverage will be
completely paid-up well before age 100
- cash value builds up faster
✔✔single premium whole life - ✔✔designed to provide a level death benefit to the
insured's age 100 for a one-time, lump-sum payment
- generate immediate cash value
✔✔adjustable life - ✔✔can assume the form of either term insurance or permanent
insurance; insured typically determines how much coverage is needed and the
affordable amount of premium
✔✔adjustable life cash value - ✔✔only develops when the premiums paid are more
than the cost of the policy
✔✔universal life (flexible premium adjustable life) - ✔✔policyowner has the flexibility to
increase/decrease amount of premium paid into policy; policyowner may skip paying a
premium and policy will not lapse as long as there is sufficient cash value at the time to
cover monthly deductions for cost of insurance
✔✔universal life premium types - ✔✔1. minimum premium: amount needed to keep
policy in force for year
2. target premium: recommended amount to keep policy in force for lifetime
✔✔2 death benefit options for universal life - ✔✔1. Option A
2. Option B
✔✔Option A (Level Death Benefit option) - ✔✔death benefit remains level while cash
value gradually increases, lowing the "pure insurance" with insurer in later years
,- death benefit increases near the end in order to maintain gap between cash value and
death benefit in life insurance policy
✔✔Option B (Increasing Death Benefit option) - ✔✔death benefit includes annual
increase in cash value so that death benefit gradually increases each year by amount
that cash value increases
- pure insurance remains level for life
✔✔variable whole life - ✔✔level, fixed premium, investment-based product; cash value
of policy is not guaranteed and fluctuates with performance of the portfolio in which
premiums have been invested by insurer
✔✔variable universal life - ✔✔combination of universal life and variable life; provides
policy owner with flexible premiums and adjustable death benefit, policyowner decides
where cash value will be invested (not guaranteed)
✔✔interest-sensitive whole life - ✔✔whole life policy that provides a guaranteed death
benefit to age 100 and for a minimum guaranteed rate of interest
✔✔indexed whole life - ✔✔cash value is dependent upon the performance of the equity
index although there is a guaranteed minimum interest rate
✔✔joint life - ✔✔single policy that is designed to insure two or more lives; premium is
less than for same type for individuals
✔✔survivorship life (second to die) - ✔✔same as joint life except pays on the last death
rather than upon the first death; joint life expectancy is extended, resulting in lower
premium
✔✔annuity - ✔✔a contract that provides income for a specified period of years, or for
life; protects a person against outliving his or her money
✔✔annuity owner - ✔✔purchaser of annuity contract, not necessarily the one who
receives benefits; has all the rights
✔✔annuitant - ✔✔person who receives benefits or payments from annuity, whose life
expectancy is taken into consideration, and for whom the annuity is written; must be a
natural person
✔✔annuity beneficiary - ✔✔person who receives annuity assets if the annuitant dies
during the accumulation period, or to whom the balance of annuity benefits is paid out
, ✔✔accumulation period - ✔✔period of time over which the owner makes payments
(premiums) into an annuity; payments earn interest on tax-deferred basis
✔✔annuitization period - ✔✔the time during which the sum that has been accumulated
is converted into a stream of income payments for the annuitant
✔✔absolute assignment - ✔✔involves transferring all rights of ownership to another
person or entity
✔✔collateral assignment - ✔✔involves a transfer of partial rights to another person;
usually done in order to secure a loan or some other transaction
✔✔premium mode - ✔✔the manner or frequency that the policyowner pays the
premium
✔✔reinstatement provision - ✔✔allows a lapsed policy to be put back in force;
maximum time limit for reinstatement is usually 3 years after the policy has lapsed
- must provide evidence of insurability but will not change attained age
✔✔incontestability clause - ✔✔prevents an insurer from denying a claim due to
statements in the application after the policy has been in force for 2 years
✔✔How many days must the insurer provide the policyowner that policy is going to
lapse? - ✔✔30 days written notice
✔✔How long may an insurance company defer a policy loan request? - ✔✔up to 6
months
✔✔automatic premium loan provision - ✔✔special type of loan that prevents the
unintentional lapse of policy due to nonpayment of premium; automatically generated by
insurer when policyowner has not paid premium by end of grace period
✔✔policy rider - ✔✔written modifications attached to a policy that provide benefits not
found in the original policy; sometimes require an additional premium
✔✔waiver of premium rider - ✔✔waves the premium for the policy if the insured
becomes totally disabled; most insurers impose 6-month waiting period
✔✔waiver of monthly deductions rider - ✔✔pays all monthly deductions while the
insured is disabled, after a 6-month waiting period
✔✔family term rider - ✔✔spouse term + children's term
QUESTIONS AND ANSWERS SURE A+
✔✔limited-pay whole life - ✔✔designed so that premiums for coverage will be
completely paid-up well before age 100
- cash value builds up faster
✔✔single premium whole life - ✔✔designed to provide a level death benefit to the
insured's age 100 for a one-time, lump-sum payment
- generate immediate cash value
✔✔adjustable life - ✔✔can assume the form of either term insurance or permanent
insurance; insured typically determines how much coverage is needed and the
affordable amount of premium
✔✔adjustable life cash value - ✔✔only develops when the premiums paid are more
than the cost of the policy
✔✔universal life (flexible premium adjustable life) - ✔✔policyowner has the flexibility to
increase/decrease amount of premium paid into policy; policyowner may skip paying a
premium and policy will not lapse as long as there is sufficient cash value at the time to
cover monthly deductions for cost of insurance
✔✔universal life premium types - ✔✔1. minimum premium: amount needed to keep
policy in force for year
2. target premium: recommended amount to keep policy in force for lifetime
✔✔2 death benefit options for universal life - ✔✔1. Option A
2. Option B
✔✔Option A (Level Death Benefit option) - ✔✔death benefit remains level while cash
value gradually increases, lowing the "pure insurance" with insurer in later years
,- death benefit increases near the end in order to maintain gap between cash value and
death benefit in life insurance policy
✔✔Option B (Increasing Death Benefit option) - ✔✔death benefit includes annual
increase in cash value so that death benefit gradually increases each year by amount
that cash value increases
- pure insurance remains level for life
✔✔variable whole life - ✔✔level, fixed premium, investment-based product; cash value
of policy is not guaranteed and fluctuates with performance of the portfolio in which
premiums have been invested by insurer
✔✔variable universal life - ✔✔combination of universal life and variable life; provides
policy owner with flexible premiums and adjustable death benefit, policyowner decides
where cash value will be invested (not guaranteed)
✔✔interest-sensitive whole life - ✔✔whole life policy that provides a guaranteed death
benefit to age 100 and for a minimum guaranteed rate of interest
✔✔indexed whole life - ✔✔cash value is dependent upon the performance of the equity
index although there is a guaranteed minimum interest rate
✔✔joint life - ✔✔single policy that is designed to insure two or more lives; premium is
less than for same type for individuals
✔✔survivorship life (second to die) - ✔✔same as joint life except pays on the last death
rather than upon the first death; joint life expectancy is extended, resulting in lower
premium
✔✔annuity - ✔✔a contract that provides income for a specified period of years, or for
life; protects a person against outliving his or her money
✔✔annuity owner - ✔✔purchaser of annuity contract, not necessarily the one who
receives benefits; has all the rights
✔✔annuitant - ✔✔person who receives benefits or payments from annuity, whose life
expectancy is taken into consideration, and for whom the annuity is written; must be a
natural person
✔✔annuity beneficiary - ✔✔person who receives annuity assets if the annuitant dies
during the accumulation period, or to whom the balance of annuity benefits is paid out
, ✔✔accumulation period - ✔✔period of time over which the owner makes payments
(premiums) into an annuity; payments earn interest on tax-deferred basis
✔✔annuitization period - ✔✔the time during which the sum that has been accumulated
is converted into a stream of income payments for the annuitant
✔✔absolute assignment - ✔✔involves transferring all rights of ownership to another
person or entity
✔✔collateral assignment - ✔✔involves a transfer of partial rights to another person;
usually done in order to secure a loan or some other transaction
✔✔premium mode - ✔✔the manner or frequency that the policyowner pays the
premium
✔✔reinstatement provision - ✔✔allows a lapsed policy to be put back in force;
maximum time limit for reinstatement is usually 3 years after the policy has lapsed
- must provide evidence of insurability but will not change attained age
✔✔incontestability clause - ✔✔prevents an insurer from denying a claim due to
statements in the application after the policy has been in force for 2 years
✔✔How many days must the insurer provide the policyowner that policy is going to
lapse? - ✔✔30 days written notice
✔✔How long may an insurance company defer a policy loan request? - ✔✔up to 6
months
✔✔automatic premium loan provision - ✔✔special type of loan that prevents the
unintentional lapse of policy due to nonpayment of premium; automatically generated by
insurer when policyowner has not paid premium by end of grace period
✔✔policy rider - ✔✔written modifications attached to a policy that provide benefits not
found in the original policy; sometimes require an additional premium
✔✔waiver of premium rider - ✔✔waves the premium for the policy if the insured
becomes totally disabled; most insurers impose 6-month waiting period
✔✔waiver of monthly deductions rider - ✔✔pays all monthly deductions while the
insured is disabled, after a 6-month waiting period
✔✔family term rider - ✔✔spouse term + children's term
