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Life Insurance provides protection against death.
Premature
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The sum payable upon the death of the insured is called the
Death Benefits
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Payments made to the policyowner while the insured is still alive are called the
Living Benefits
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The person who controls all rights to the policy while the insured is alive is called the
Policyowner
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The receives the death benefit when the insured dies.
beneficiary
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The entity that agrees to pay the benefits cited in the policy is the
Insurer
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insurance provides for payment of the face amount at maturity or the insured’s death.
Permanent
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The amount promised to be paid by the insurer to the policyowner at maturity of the policy is called the
Endowment
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insurance pays the face amount only if the insured dies within a certain period of time.
Term
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The different variations of whole life policies differ only with respect to how and when are to be paid.
premiums
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Basil wants a policy that provides for level premiums and level coverage for the duration of the policy. He will buy a (different acceptable answers).
straight life/ordinary life/level premium whole life/continuous premium/whole life policy
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With a payment plan, premiums do not change as the insured gets older
level premium
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The amount held in reserve by the insurer is called the policy’s .
cash value
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The face amount of a whole life policy consists of the and the .
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Any excess premiums the first years can be used to pay commissions and other sales expenses.
two
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A policy with a face amount of $100,000 that has $25,000 in cash value has as the amount at risk portion.
$75,000
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If a policy loan is not repaid before the insured dies, the and the will be deducted from the policy proceeds.
- outstanding loan balance
- unpaid interest
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If a policyowner cancels his whole life policy, state laws state that the accumulated cash value cannot be forfeited.
nonforfeiture
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A “20-pay life” policy has premiums that are payable for years and then the policy is considered to be
paid up
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A “life paid up at age 65” policy has premiums payable until age and will remain in force until age or death, whichever occurs first.
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3. A whole life policy that is paid up with only one premium payment is called a whole life policy.
single-premium
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The policy that has the largest up front premium but is the least expensive in the long run would be a whole life policy
single-premium
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The whole life policy that allows the policyowner to make changes to the term, face amount, and premiums would be called an policy
adjustable life
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Term insurance is considered , as it only pays a death benefit if the insured dies during the term selected and provides no living benefits.
temporary insurance
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Term insurance policies do NOT accumulate .
cash value
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Term insurance has a initial premium than permanent insurance.
lower
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Three basic types of term insurance are level term, term, and term
- level
- decreasing
- increasing
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The term policy that provides the same amount of protection throughout the selected term is called term insurance
level
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term insurance provides coverage that reduces over the policy term.
Decreasing
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The type of insurance issued on the life of a borrower used to pay off a loan if the insured dies is referred to as insurance and the type of insurance used to pay off the balance of your home loan is called insurance.
- credit life
- mortgage protection/mortgage or redemption/mortgage life
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A term insurance policy that has a death amount that gets larger as the policy continues is called an insurance policy.
increasing term
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A term policy that allows the insured to buy an additional term period of coverage without evidence of insurability is term insurance.
renewable
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A renewable term insurance policy is said to have a premium, as premiums will increase at each renewal to reflect the insured’s higher age.
step-rate
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Under a term insurance policy the premium will be reduced to a select, but if the insured cannot prove insurability, the insured can renew only at a higher, or level
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A term policy that allows the insured to change to a permanent insurance policy without any evidence of insurability is a term insurance policy.
convertible
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Term insurance may be converted at either the insured’s age or at the insured’s age, depending on the terms of the policy
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A permanent insurance policy specifically set to endow before age 100 is known as an policy.
endowment
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A 30-year endowment policy provides insurance coverage for years and will endow in years.
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An endowment policy sold after 1984 is not treated as life insurance for purposes
tax
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Retirement income policies are a combination of an and an .
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If the insured in an endowment policy dies prior to endowment, the beneficiary will receive either the or the , whichever is greater.
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An life insurance policy allows the policyowner to have the excess interest credited to either the cash value account or used to pay future premiums
interest-sensitive
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If an interest-sensitive life policy has a guaranteed rate of 4% and the current interest rate is 7%, the excess interest would be .
3%
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Interest-sensitive life policies have , death benefits.
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A universal life policy offers death benefits and a premium.
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The premium paid for a universal life policy is a premium, or recommended premium payment amount.
target
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Universal life policies allow loans, by borrowing the cash value, or of the cash value without borrowing it.
withdrawal
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Withdrawals from a universal life policy can either be or and will reduce the amount by the amount withdrawn.
- partial
- total
- death benefits
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Universal life policies may have either -end or -end loads to cover sales and other expenses incurred by the insurer.
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Universal life Option provides a level death benefit, and Option provides an death benefit.
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In order to qualify as insurance for federal tax purposes, a universal life insurance policy’s cash value cannot equal the death benefit until at least age .
95
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The death benefit of a universal life Option B policy is the plus the .
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Universal life policies are considered , meaning the cash value, expenses, and mortality charges are handled and shown separately.
unbundled
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The policyowner of a universal life policy is able to see how the premium is used and the changes in the benefits each year. This means that universal life policies are considered .
transparent
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Variable whole life insurance covers the insured to age or death, whichever occurs first.
100
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Cash values in a variable whole life policy are invested into a account.
separate
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There is usually a charge for cancellation of a variable whole life policy in the first policy years.
surrender
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The bears the investment risk in a variable life policy.
policyowner
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The type of life policy that has death benefits and cash value that vary over the life of the policy and also contains adjustable death benefits and a flexible premium is known as
variable universal life
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Variable life insurance policies must be registered with the , and the purchaser must be given a showing his rights, the risks, the fees, etc.
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The policy that covers more than one insured and pays the death benefit when the first insured dies is called a policy, also known as a policy.
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A life policy is one policy that covers more than one person and pays the death benefit after ALL insureds have died.
survivorship
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With a group insurance policy, a policy is issued to the policyowner, most often an employer.
master
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Anyone other than the may be the beneficiary of a group insurance policy.
employer
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The period of time that you must work for an employer before you are eligible for a group insurance policy is called the period.
probationary (employment probation)
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The benefit that pays monthly income to the surviving spouse and children for a certain period of time, in addition to the death benefit, is called a benefit.
survivorship
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Group insurers must be wary of , a tendency that exists when people who expect to die early are buying the life insurance, while those who expect to live longer are not buying the insurance.
adverse selection
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To avoid adverse selection, insurers insist that the insurance must be to the group; the group must have been formed for purposes other than buying group insurance
incidental
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In a group plan, the employees pay all or part of the premium.
contributory
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In a group plan, the premium is fully paid by the employer.
noncontributory
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Medical exams are generally required only if a person applies for coverage in a group policy after their has expired.
eligibility period
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In a contributory plan, of eligible employees must participate, while in a noncontributory plan must generally participate in the plan.
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An insured member can usually convert his group term policy to an policy.
individual
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The premium for a converted group policy will be based on the insured’s age
attained
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The type of insurance that is used to provide funds to keep a business going when an owner, partner or stockholder dies is referred to as insurance.
business continuation
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When each partner buys a policy on the lives of the other partners, the partnership has used a plan buy-sell (buyout) agreement.
cross-purchase
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When a partnership buys, owns and is beneficiary of the life insurance policies used to fund the buyout agreement, the plan used was an .
entity plan
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A corporation would utilize a plan to fund a buyout agreement.
stock redemption
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A plan whereby the employer and employee share the costs of a life insurance policy is known as a(n) life insurance plan.
split-dollar
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The shared costs of a split-dollar plan include the , the , and the for life insurance.
- death benefit
- living benefit
- premium
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A(n) plan provides that the employee will buy a permanent life insurance policy insuring his own life with funds from the employer.
executive bonus
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The person who contracts with the insurance company is known as the , and the person who will receive the payments from the annuity is known as the .
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An annuity provides for of an estate through annuity payments to the annuitant.
liquidation
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The entities that sell annuities are .
insurance companies
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annuities earn a stated interest rate, and annuities earn a return on investment.
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Both fixed annuities and variable annuities are based on and guarantees from the insurer
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In a fixed annuity, the insurer bears the and risks.
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In a variable annuity, the bears the investment risk.
annuitant
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Variable annuities must be registered with the , producers selling these annuities must be registered with the or the , and the annuitant must be given a .
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Premiums on variable annuities are placed into a account and converted to units
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When an annuitant has finished paying premiums into a variable annuity account and begins to receive the payments, the annuitant’s interest in the separate account is converted to .
annuity units
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The annuity that will make payments to the annuitant immediately after funding is known as an annuity
immediate
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A person buying an immediate annuity wants their annuity payments to be sent to them quarterly. The first payment will be received by the annuitant months after funding.
three
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The annuity that will begin making payments to the annuitant after more than one payment interval has elapsed is known as a annuity
deferred
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Deferred annuities will provide a death benefit only if the annuitant dies during the period before any annuity payments have been received by the annuitant.
accumulation
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An annuity paid for with a lump sum is known as a annuity
single premium
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An immediate annuity can only be purchased with a .
single premium
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The annuity that requires periodic premium payments is called a annuity and can only be used to buy a annuity.
- fixed installment/level payment
- deferred
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The premium paying method whereby premiums can vary as to timing and amount is referred to as a annuity.
flexible premium
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. The annuity payout that provides payments only for the life of the annuitant, and will then stop upon death of the annuitant is called a or , or a annuity.
- life annuity
- pure life
- straight life
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A life annuity payout is based on the annuitant’s expectancy, the amount of paid for the annuity, and the amount of earned on the funds held by the insurer
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If any payments are still due to be paid out after the annuitant’s death, they will go to the annuitant’s .
beneficiary
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The or annuity makes payments for a certain, specified period of time, even if the annuitant dies early.
- annuity certain
- period certain
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The annuity pays until the annuitant dies or the total amount of premiums paid for the annuity is refunded, whichever is longer.
cash or installment refund
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With a refund annuity, the refund is paid in a lump sum.
cash
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With an refund annuity, the refund is paid in continued annuity payments.
installment
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An annuity that bases annuity payments on the life of one annuitant is called an life annuity
individual
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Annuities that base payments on the lives of two or more annuitants and cease when any annuitant dies are known as annuities
joint life
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The annuity that will continue payments after the death of the first annuitant is called a and annuity, also known as a annuity.
- joint
- survivorship
- last survivor
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The annuity that combines a life insurance policy with an annuity is a annuity.
survivorship
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An additional section or page attached to and made part of a life policy is called a .
rider
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The option that provides that the insurer will advance some or all of the death benefit during the insured’s lifetime is referred to as an .
accelerated death benefit option
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Available term riders include level term, term and term insurance.
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The term of these riders cannot exceed the period of the permanent policy.
premium payment
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The rider which increases the amount the beneficiary will receive if the insured dies accidentally is called the rider.
accidental death benefit
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The amount paid to the beneficiary in the event of accidental death is called the .
principal sum
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The amount paid to the insured in the event of accidental dismemberment is referred to as the .
capital sum
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A indemnity rider would pay twice the face amount in the event of accidental death, and a indemnity rider would pay three times the face amount in the event of accidental death.
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The rider that allows the insured to buy more insurance at specified dates and life events without evidence of insurability is called a rider.
guaranteed insurability
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The rider that states that the policyowner/insured need not pay any premiums while totally and permanently disabled is called the rider.
waiver of premium
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The waiver of premium benefit usually expires at age or , unless the insured is receiving benefits from this rider at that time.
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The rider pays the insured a monthly income while totally and permanently disabled.
disability income
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The party that owns a juvenile insurance policy is the of the policy.
payor
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The rider that will pay the premiums on the juvenile policy in the event the payor is disabled or dead is called the rider, or the of .
- payor benefit
- payor waiver
- premium
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The rider that adds term insurance coverage on a husband or wife is the rider.
spousal
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A may be used to add term insurance on all children in the family.
children’s rider
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Children’s term insurance riders cover all children in the household from days old to the limiting age specified in the policy
15
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The rider that adds term coverage on the spouse and children would be called the rider.
family
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