Insurance MCQ

How is Variable Whole Life different from Variable Universal Life? A It is designed to provide a hedge against inflation B Cash values can be invested in a separate account C The policyowner takes on all of the investment risk D The policy has a guaranteed minimum face amount Answer: D

The owner of a Variable Life Policy may allocate the premium into a sub-account which is owned by the insurer, this sub-account is a part of what is also known as the: A Separate Account B Accumulation Account C Allocation Account D Side Fund Answer: A

Variable Universal Life should only be sold to those clients who are: A More investment savvy B First time investors C Looking for guarantees D Very conservative Answer: A

How much of a cash value policy loan will an insurer normally grant with a variable type policy? A 75-90% B 50-75% C 100% D 80-90% Answer: A

Money accumulated in a permanent policy that the policyowner may borrow via a policy loan or receive if the policy is surrendered, refers to: A Savings Account B Accumulated at Interest Account C Deferred Savings Account D The Cash Value Answer: D

Which of the following best describes an Annual Renewable Term Policy? A A policy with decreasing premium at each renewal B A policy with an increased face value at each renewal C A policy with a level death benefit, but with increased premium at each renewal D A policy with increasing cash value at each renewal Answer: C

Which of the following riders is used to increase the death benefit if death is the result of an unintended fatal injury, paying a multiple of the face amount? A Accidental Death B Disability Benefit C Accelerated Death Benefits D Payor Benefit Answer: A

What is the name of the rider (benefit) that, in the event of a claim, the policy normally pays double or triple the face amount if death was a result of an accident. A Occupational B Accidental Death C Auto Insurance D Additional Indemnity Answer: B

In order for a death benefit to be paid to a beneficiary, with of a 15-pay Whole Life Policy, the insured must pay premiums: A Until the insured dies whenever that occurs B For 15 years or the insured's death whichever time period is greater C For 15 years regardless of when the insured dies D For 15 years, or until the insured's death, whichever occurs first Answer: D

An ordinary straight whole life policy issued 30 years ago would endow at what age? A 121 B 100 C 65 D 95 Answer: B

Mortgage or credit life refers to what type of life insurance coverage? A Renewable term B Increasing term C Level term D Decreasing term Answer: D

Adjustable life allows the policyowner to do all of the following, except: A Adjust the premium B Adjust the death benefit C Change the insured D Adjust the premium paying period Answer: C

Permanent insurance is designed to provide coverage ___________. A To age 65 B For a specified period of time C For an entire lifetime D For a temporary period of time Answer: C

A mother with a teenage son purchases a life policy on his life. The policy includes an optional rider called the Payor Benefit. What will happen to the policy if the mother dies or is disabled before her son reaches age of majority? A The premiums would be suspended and later paid back by the son B The premiums on the son's policy would be waived until the son reaches a specified age C The amount of coverage is reduced as the policy is paid up D The policy would pay out a modest lump sum to the beneficiary Answer: B

Equity Indexed, Variable, and Variable Universal all have which of the following characteristics in common? A The owner chooses the separate account(s) to invest the cash values in B All have a guaranteed death benefit C A securities license is required to sell each policy D The overall policy performance has something to do with the stock market in general Answer: D

How would a term policy normally be used to pay off a mortgage upon death? A Using the death proceeds after the insured has died B By using the policy as collateral for a policy loan C Through a viatical or life settlement D By using the policy's cash values Answer: A

Which of the following is not a form of permanent life insurance coverage? A Ordinary straight whole life B Adjustable life C Term to age 70 D Indeterminate premium whole life Answer: C

Whole Life is also known as ________ protection. A Absolute B Permanent C Temporary D Periodic Answer: B

Which of the following term life insurance policies cannot be renewed? A Decreasing B Level C Increasing D Re-entry Answer: A

In a Universal Life policy, the minimum separation between the cash value and the death benefit is called the _______. A Earned interest B MEC limit C Risk corridor D Cash value Answer: C