Life & Health Insurance Exam Colorado 100+ questions with correct answers
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Course
Life & Health
Institution
Life & Health
Life & Health Insurance Exam Colorado 100+ questions with correct answers/Life & Health Insurance Exam Colorado 100+ questions with correct answers/Life & Health Insurance Exam Colorado 100+ questions with correct answers
Life & Health Insurance Exam Colorado
Traditional Whole Life - correct answer -Ordinary (Straight) Life
-Limited-Pay & Single-Premium Whole Life
-Adjustable Whole Life
Ordinary (Straight) Life - correct answer -Until 100 or Death, whichever comes first
-Permanent Protection
-Rates & benefits based on law of large numbers (Mortality Rate)
-Guaranteed, tax-deferred interest rate
-Premium level, company's risk goes down as cash value goes up
-Insurer keeps the cash value if death to offset risk
-Lowest net cost in long run
-Client has access to cash through cash surrender or policy loan
-Rates are per unit of protection (1,000 is 1 unit)---TEST
-Cash value is guaranteed
-Cash value will equal face amount at policy maturity
Limited-Pay & Single-Premium Whole Life - correct answer -Premium paying period is shorter
-Cash value still equals face amount at age 100
-20 pay life will be paid up in 20 years PL
-Life Paid up at age 65, will be paid up at 65 LP
-A single premium policy will have an immediate cash value (1-pay life)---TEST
Adjustable Whole Life----TEST - correct answer -Sold to clients with fluctuating incomes----TEST
-Combination of term and whole life----TEST
-Coverage may not be increased without physical exam---TEST
Interest/Market Sensitive Whole Life Products - correct answer -Universal Whole life
-Variable Whole life
-Variable/Universal Whole life
-Equity-Indexed Life
Universal Whole life - correct answer -Guaranteed minimum interest rates
,Life & Health Insurance Exam Colorado
-Extreme flexibility regarding premium PMTs----TEST
-Most flexible product
-Target premium based on projected earnings
-Option A UL has level death benefits
-Option B UL will pay beneficiary both face amount + cash value
Variable Whole life - correct answer -Cash value deposited into a separate account
-Requires FINRA series 6 or 7 to sell
-Used to be called NASD
-Regulated by SEC
-Regulated by FINRA (Financial Industry Regulatory Authority)
-NYSE license not required
-Minimum death benefit (face amount) is guaranteed---TEST
-Has fixed premium---TEST
Variable/Universal Whole life - correct answer -Requires Finra(series 6 or 7) licenses to sell
-Allows client to self-direct cash values into sub-account---TEST
-Flexible premium
Equity-Indexed Life - correct answer -cash value, where minimum death benefit is guaranteed
as well as the minimum earning on the cash value in the general account
-Securities license is not required
-Fixed Premium
Term Life - correct answer -Level Term
-Decreasing Term
-Increasing Term
General Features of Term Insurance - correct answer -Premium goes up every year
-May be converted to whole life at current attained age regardless of health
-May be renewable up to certain age without physical
Level Term - correct answer Both premium and face amount are level for period of time
, Life & Health Insurance Exam Colorado
Decreasing Term - correct answer -Face amount goes down but premium remains the same
-Usually convertible to whole life regardless of health
-Premium stays the same but cost increases as face amount decreases
Increasing Term - correct answer -Face amount goes up instead of down
-Allows beneficiary to receive the face amount + premiums or cash values
-Also known as Universal Life option B
Special features of Term Insurance - correct answer -Renewable/Convertible to whole up to
certain date or age regardless of health
-Conversion based on current age
-May only convert to more expensive option
-Cannot convert to term
-Cannot convert to more coverage than you have
Return of Premium under Term - correct answer The premium for a return of premium policy
is generally more than that for a term policy, but less than that of a traditional whole life policy
General Features of Annuities - correct answer -Always have beneficiary during the pay-in or
accumulation period
-May or may not have a beneficiary during the pay-out or annuity period
-During pay-out period all Pmt's are for the life of the annuitant
-Long-term investments subject to 10% early withdrawal penalties on withdrawals taken prior
to 59.5
-Immediate annuities have no pay-in or accumulation period--single premium
-Variable annuities use a separate account (Like Mutual fund)
-Have 30-day grace period
Annuity Pay-Out Options - correct answer -Contractual; cannot be changed once selected
-Amount received in excess of cost are taxable as ordinary income
-For life
-Cash surrender under age 59.5 subject to IRS 10% penalty
-Non-qualified=Funded with after tax dollars
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