LOMA 281 Module 2 questions with complete
solutions
Term Life insurance - ANSWERS Insurance that provides a policy benefit if the insured dies during a
specified period of time.
Policy term - ANSWERS The specified period of time for which a term life insurance policy provides
coverage.
Level Term life insurance - ANSWERS A plan of term life insurance that provides a policy benefit that
remains the same over the term of coverage.
Decreasing term life insurance - ANSWERS A plan of term life insurance that provides a policy benefit
that decrease in amount over the term of coverage.
Increasing term life insurance - ANSWERS A plan of life insurance that provides a policy benefit that
starts at one amount and increases by some specified amount or percentage at stated intervals over the
term of coverage.
Mortgage insurance - ANSWERS A plan of decreasing term life insurance designed to provide a benefit
amount that corresponds to the decreasing amount owed on a mortgage loan
Credit life insurance - ANSWERS A type of term life insurance designed to pay the balance due on a loan
if the borrower dies before the loan is paid
Family income coverage - ANSWERS A plan of decreasing term life insurance that provides a stated
monthly income benefit amount to the insured's surviving spouse if the insured dies during the term of
coverage.
, Return of premium term insurance - ANSWERS A type of term insurance that provides a death benefit if
the insured dies during the term of coverage and that promises a return of premiums if the insured does
not die during the term of coverage.
Renewable term insurance - ANSWERS Term life insurance that gives the policyowner the option to
continue the policy's coverage for an additional policy term without providing evidence of insurability.
Evidence of insurability - ANSWERS Proof that a given person is an insurable risk.
Convertible term insurance - ANSWERS Term life insurance that gives the policyowner the right to
convert the term policy to a cash value life insurance policy without providing evidence of insurability.
Conversion period - ANSWERS The specified period of time following policy issue during which the
owner of a convertible term life insurance policy can convert the coverage to cash value life insurance.
Original age conversion - ANSWERS A conversion of a term life insurance policy to a cash value life
insurance policy in which the renewal premium rate is based on the insured's age when the original
term life insurance policy was issued.
Cash value life insurance - ANSWERS Insurance that provides life insurance coverage throughout the
insured's lifetime and also provides a savings element.
Cash value - ANSWERS The savings element of a cash value life insurance policy, which represents the
policyowner's ownership interest in the policy.
Policy loan - ANSWERS A loan a policyowner receives from an insurer using the cash value of a life
insurance policy as security.
Cash surrender value - ANSWERS The amount, after adjustments for factors such as policy loans, that
the owner of a cash value life insurance policy is entitled to receive upon surrendering the policy.
Single premium payment - ANSWERS A type of limited-payment whole life insurance policy that
requires only one premium payment.
solutions
Term Life insurance - ANSWERS Insurance that provides a policy benefit if the insured dies during a
specified period of time.
Policy term - ANSWERS The specified period of time for which a term life insurance policy provides
coverage.
Level Term life insurance - ANSWERS A plan of term life insurance that provides a policy benefit that
remains the same over the term of coverage.
Decreasing term life insurance - ANSWERS A plan of term life insurance that provides a policy benefit
that decrease in amount over the term of coverage.
Increasing term life insurance - ANSWERS A plan of life insurance that provides a policy benefit that
starts at one amount and increases by some specified amount or percentage at stated intervals over the
term of coverage.
Mortgage insurance - ANSWERS A plan of decreasing term life insurance designed to provide a benefit
amount that corresponds to the decreasing amount owed on a mortgage loan
Credit life insurance - ANSWERS A type of term life insurance designed to pay the balance due on a loan
if the borrower dies before the loan is paid
Family income coverage - ANSWERS A plan of decreasing term life insurance that provides a stated
monthly income benefit amount to the insured's surviving spouse if the insured dies during the term of
coverage.
, Return of premium term insurance - ANSWERS A type of term insurance that provides a death benefit if
the insured dies during the term of coverage and that promises a return of premiums if the insured does
not die during the term of coverage.
Renewable term insurance - ANSWERS Term life insurance that gives the policyowner the option to
continue the policy's coverage for an additional policy term without providing evidence of insurability.
Evidence of insurability - ANSWERS Proof that a given person is an insurable risk.
Convertible term insurance - ANSWERS Term life insurance that gives the policyowner the right to
convert the term policy to a cash value life insurance policy without providing evidence of insurability.
Conversion period - ANSWERS The specified period of time following policy issue during which the
owner of a convertible term life insurance policy can convert the coverage to cash value life insurance.
Original age conversion - ANSWERS A conversion of a term life insurance policy to a cash value life
insurance policy in which the renewal premium rate is based on the insured's age when the original
term life insurance policy was issued.
Cash value life insurance - ANSWERS Insurance that provides life insurance coverage throughout the
insured's lifetime and also provides a savings element.
Cash value - ANSWERS The savings element of a cash value life insurance policy, which represents the
policyowner's ownership interest in the policy.
Policy loan - ANSWERS A loan a policyowner receives from an insurer using the cash value of a life
insurance policy as security.
Cash surrender value - ANSWERS The amount, after adjustments for factors such as policy loans, that
the owner of a cash value life insurance policy is entitled to receive upon surrendering the policy.
Single premium payment - ANSWERS A type of limited-payment whole life insurance policy that
requires only one premium payment.
