Chapter 3 Exam Questions with Verified Answers Graded A
F needs life insurance that provides coverage for What advantage does the renewability feature
only a limited amount of time with a death benefit give to a term policy? - ANSWER -The
that changes regularly according to a schedule. insured may extend the coverage period
What kind of policy is needed? -
ANSWER -Decreasing Term Policy
S owns a life insurance policy with cash values
that fluctuate according to the underlying
Term Life Policies that have the ability to be investment performance of common stocks.
converted to permanent coverage may do so Which of these policies does S own? -
during a specific time period. This conversion ANSWER -Variable Whole Life
period - ANSWER -Varies according to the
contract
Term insurance has which of the following
characteristics? - ANSWER -Expires at the
A(n) ____ term life policy normally used when end of the policy period
covering an insured's mortgage balance -
ANSWER -Decreasing
Which of the following types of Term Life policies
likely contains a renewability feature? -
What type of life policy has a death benefit that ANSWER -10 Year Convertible Term
adjusts periodically and is written for a specific
period of time? - ANSWER -Decreasing
Term
Which provision allows the policyowner to
change a term life policy to a permanent one
without providing proof of good health? -
K is looking to purchase Renewable Term ANSWER -Conversion
insurance. Which of these types of Term
insurance may be renewable? - ANSWER -
Level
T would like to be assured $10,000 is available in
10 years to replace a roof on his house. What
kind of $10,000 policy should T purchase? -
K buys a policy where the premium stays fixed ANSWER -Ten-Year Endowment
for the first 5 years. The premium then increases
in year 6 and stays level thereafter, all the while
the death benefit remains the same. What kind of
policy is this? - ANSWER -Modified Whole What type of life insurance incorporates flexible
Life premiums and an adjustable death benefit? -
ANSWER -Universal Life
1/3
F needs life insurance that provides coverage for What advantage does the renewability feature
only a limited amount of time with a death benefit give to a term policy? - ANSWER -The
that changes regularly according to a schedule. insured may extend the coverage period
What kind of policy is needed? -
ANSWER -Decreasing Term Policy
S owns a life insurance policy with cash values
that fluctuate according to the underlying
Term Life Policies that have the ability to be investment performance of common stocks.
converted to permanent coverage may do so Which of these policies does S own? -
during a specific time period. This conversion ANSWER -Variable Whole Life
period - ANSWER -Varies according to the
contract
Term insurance has which of the following
characteristics? - ANSWER -Expires at the
A(n) ____ term life policy normally used when end of the policy period
covering an insured's mortgage balance -
ANSWER -Decreasing
Which of the following types of Term Life policies
likely contains a renewability feature? -
What type of life policy has a death benefit that ANSWER -10 Year Convertible Term
adjusts periodically and is written for a specific
period of time? - ANSWER -Decreasing
Term
Which provision allows the policyowner to
change a term life policy to a permanent one
without providing proof of good health? -
K is looking to purchase Renewable Term ANSWER -Conversion
insurance. Which of these types of Term
insurance may be renewable? - ANSWER -
Level
T would like to be assured $10,000 is available in
10 years to replace a roof on his house. What
kind of $10,000 policy should T purchase? -
K buys a policy where the premium stays fixed ANSWER -Ten-Year Endowment
for the first 5 years. The premium then increases
in year 6 and stays level thereafter, all the while
the death benefit remains the same. What kind of
policy is this? - ANSWER -Modified Whole What type of life insurance incorporates flexible
Life premiums and an adjustable death benefit? -
ANSWER -Universal Life
1/3
