Nevada Life & Health Insurance Exam
Q&A 100% Solved | Graded A+
term insurance - ✔✔temporary protection because it only provides
coverage for a specific period of time
face amount - ✔✔death benefit
3 basic types of term coverage - ✔✔level, increasing, decreasing
- based on how the face amount changes during the policy term
What is the premium in term insurance? - ✔✔regardless of type of term
insurance purchased, premium is level throughout the term of policy
level term insurance - ✔✔death benefit does not change throughout the life
of the policy
annually renewable term - ✔✔premium increases annually according to the
attained age, guaranteed to be renewable each year
decreasing term - ✔✔level premium and death benefit that decreases each
year over duration of the policy term
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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,increasing term - ✔✔level premium and death benefit that increases each
year over the duration of the policy term
return of premium life insurance - ✔✔an increasing term policy that pays an
additional death beneficiary equal to the amount of the premiums paid
- return of premium is paid if the death occurs within a specified period of
time or if the insured outlives the policy term
renewable provision - ✔✔allows the policyowner the right to renew
coverage at the expiration date without evidence of insurability
convertible provision - ✔✔provides the policyowner the right to convert the
policy to a permanent insurance policy without evidence of insurability
permanent life insurance - ✔✔general term used to refer to various forms
of life insurance policies that build cash value and remain in effect for the
entire life of the insured (or until age 100) as long as premium is paid
nonforteiture value - ✔✔aka cash value, does not usually accumulate until
the third policy year and it grows tax deferred
key characteristics of whole life insurance - ✔✔- level premium
- death benefit
- cash value
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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,- living benefits
3 basic forms of whole life insurance - ✔✔1. straight (ordinary) whole life
2. limited-pay whole life
3. single premium whole life
straight life - ✔✔basic whole life policy; policy owner pays the premium
from the lime the policy is issued until insured's death or age 100
- has lowest annual premium
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
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, 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
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Q&A 100% Solved | Graded A+
term insurance - ✔✔temporary protection because it only provides
coverage for a specific period of time
face amount - ✔✔death benefit
3 basic types of term coverage - ✔✔level, increasing, decreasing
- based on how the face amount changes during the policy term
What is the premium in term insurance? - ✔✔regardless of type of term
insurance purchased, premium is level throughout the term of policy
level term insurance - ✔✔death benefit does not change throughout the life
of the policy
annually renewable term - ✔✔premium increases annually according to the
attained age, guaranteed to be renewable each year
decreasing term - ✔✔level premium and death benefit that decreases each
year over duration of the policy term
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,increasing term - ✔✔level premium and death benefit that increases each
year over the duration of the policy term
return of premium life insurance - ✔✔an increasing term policy that pays an
additional death beneficiary equal to the amount of the premiums paid
- return of premium is paid if the death occurs within a specified period of
time or if the insured outlives the policy term
renewable provision - ✔✔allows the policyowner the right to renew
coverage at the expiration date without evidence of insurability
convertible provision - ✔✔provides the policyowner the right to convert the
policy to a permanent insurance policy without evidence of insurability
permanent life insurance - ✔✔general term used to refer to various forms
of life insurance policies that build cash value and remain in effect for the
entire life of the insured (or until age 100) as long as premium is paid
nonforteiture value - ✔✔aka cash value, does not usually accumulate until
the third policy year and it grows tax deferred
key characteristics of whole life insurance - ✔✔- level premium
- death benefit
- cash value
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
,- living benefits
3 basic forms of whole life insurance - ✔✔1. straight (ordinary) whole life
2. limited-pay whole life
3. single premium whole life
straight life - ✔✔basic whole life policy; policy owner pays the premium
from the lime the policy is issued until insured's death or age 100
- has lowest annual premium
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
3
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, 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
4
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
