Type of Insurance Policies (Xcel
solutions) Correct Answers
What kind of insurance policy supplies an income stream over a set period of time
that starts when the insured dies? - ANSWER-Family Maintenance Policy
Which of these types of life insurance allows the policy owner to have level
premiums and to also choose from a selection of
When applied to Whole Life insurance, the word "straight" denotes - ANSWER-The
duration of premium payments
Which of these characteristics is consistent with a Straight Life Policy? - ANSWER-
Premiums are payable for as long as there is insurance coverage in force
P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end
of that 20 year period. What type of policy should P Purchase? - ANSWER-A family
maintenance policy should be purchased.
How Long does the coverage normally remain on a limited-pay life policy -
ANSWER-Age 100
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ANSWER-Decreasing Term Policy- a life insurance policy written for a
specified period of time with a death benefit that changes regularly according to a
schedule is a decreasing term policy
A 15-year montage is best protected by what kind of life policy? - ANSWER-15-year
decreasing term
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - ANSWER-Variable Life
Which provision allows the policy owner to change a term life policy to a permanent
one without providing proof of good health - ANSWER-Conversion
A policy that becomes a Modified Endowment Contract (MEC) - ANSWER-Will lose
many of its tax advantages- when a policy becomes a modified Endowment Contract
(MEC), many of the tax adv. are lost
A whole life Insurance Policy Endows when the: - ANSWER-Cash value equals the
death benefit
, Credit life insurance is typically issued with which of the following types of coverage?
- ANSWER-Decreasing Term- the type of insurance used for Credit Life is typically
decreasing term, with the term matched to the length of the loan period
A renewable term policy is renewable at the option of the: - ANSWER-Insured
What type of life insurance gives the greater amount of coverage for a limited period
of time - ANSWER-term life
K pays on $20,000 20-year endowment policy for 10 years and dies from an
automobile accident. How much will the insurance company pay the beneficiary -
ANSWER-20,000 death benefit- if the insured dies before the endowment's maturity,
the policy face value- also known as the "death benefit"
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a
life insurance policy with level premiums, permanent protection, and be paid-up at
retirement. Which of these should N purchase? - ANSWER-30 pay life
Which of these statements describe a Modified Endowment Contract (MEC) -
ANSWER-Exceeds the maximum amount of premium that can be paid into a policy
and still have it recognized as a life insurance contract
When is the face amount paid under a Joint Life and Survivor Policy? - ANSWER-
Upon death of the last insured
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They
purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT
be paid in which of the following circumstances? - ANSWER-L's spouse dies at age
66- L's spouse has coverage until age 65
Which of the following combination plans is designed to protect an insured from an
unpaid mortgage balance upon premature death? - ANSWER-Joint Life- policy
covers two or more people. Using some type of permanent insurance (as opposed to
term), it pays the death benefit at the first insured's Death
A term life insurance policy matures: - ANSWER-Upon the insured's death during the
term of the policy- Term life policies can only mature (pay out the face amount) if
death occurs during the term of the policy
The amount of coverage on a group credit life policy is limited to: - ANSWER-The
insured's total loan value
Which statement is TRUE regarding a Variable Whole Life policy? - ANSWER-A
minimum guaranteed Death benefit is provided- A Variable Whole Life Policy
provides a minimum guaranteed death benefit
A life insurance policy that provides a policy owner with cash value along with a level
face amount is called: - ANSWER-Whole Life
solutions) Correct Answers
What kind of insurance policy supplies an income stream over a set period of time
that starts when the insured dies? - ANSWER-Family Maintenance Policy
Which of these types of life insurance allows the policy owner to have level
premiums and to also choose from a selection of
When applied to Whole Life insurance, the word "straight" denotes - ANSWER-The
duration of premium payments
Which of these characteristics is consistent with a Straight Life Policy? - ANSWER-
Premiums are payable for as long as there is insurance coverage in force
P is looking to purchase a life insurance policy that will pay a stated monthly income
to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end
of that 20 year period. What type of policy should P Purchase? - ANSWER-A family
maintenance policy should be purchased.
How Long does the coverage normally remain on a limited-pay life policy -
ANSWER-Age 100
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ANSWER-Decreasing Term Policy- a life insurance policy written for a
specified period of time with a death benefit that changes regularly according to a
schedule is a decreasing term policy
A 15-year montage is best protected by what kind of life policy? - ANSWER-15-year
decreasing term
Which policy requires an agent to register with the National Association of Securities
Dealers (NASD) before selling? - ANSWER-Variable Life
Which provision allows the policy owner to change a term life policy to a permanent
one without providing proof of good health - ANSWER-Conversion
A policy that becomes a Modified Endowment Contract (MEC) - ANSWER-Will lose
many of its tax advantages- when a policy becomes a modified Endowment Contract
(MEC), many of the tax adv. are lost
A whole life Insurance Policy Endows when the: - ANSWER-Cash value equals the
death benefit
, Credit life insurance is typically issued with which of the following types of coverage?
- ANSWER-Decreasing Term- the type of insurance used for Credit Life is typically
decreasing term, with the term matched to the length of the loan period
A renewable term policy is renewable at the option of the: - ANSWER-Insured
What type of life insurance gives the greater amount of coverage for a limited period
of time - ANSWER-term life
K pays on $20,000 20-year endowment policy for 10 years and dies from an
automobile accident. How much will the insurance company pay the beneficiary -
ANSWER-20,000 death benefit- if the insured dies before the endowment's maturity,
the policy face value- also known as the "death benefit"
N is a 40-year old applicant who would like to retire at age 70. He is looking to buy a
life insurance policy with level premiums, permanent protection, and be paid-up at
retirement. Which of these should N purchase? - ANSWER-30 pay life
Which of these statements describe a Modified Endowment Contract (MEC) -
ANSWER-Exceeds the maximum amount of premium that can be paid into a policy
and still have it recognized as a life insurance contract
When is the face amount paid under a Joint Life and Survivor Policy? - ANSWER-
Upon death of the last insured
L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They
purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT
be paid in which of the following circumstances? - ANSWER-L's spouse dies at age
66- L's spouse has coverage until age 65
Which of the following combination plans is designed to protect an insured from an
unpaid mortgage balance upon premature death? - ANSWER-Joint Life- policy
covers two or more people. Using some type of permanent insurance (as opposed to
term), it pays the death benefit at the first insured's Death
A term life insurance policy matures: - ANSWER-Upon the insured's death during the
term of the policy- Term life policies can only mature (pay out the face amount) if
death occurs during the term of the policy
The amount of coverage on a group credit life policy is limited to: - ANSWER-The
insured's total loan value
Which statement is TRUE regarding a Variable Whole Life policy? - ANSWER-A
minimum guaranteed Death benefit is provided- A Variable Whole Life Policy
provides a minimum guaranteed death benefit
A life insurance policy that provides a policy owner with cash value along with a level
face amount is called: - ANSWER-Whole Life
