TX - LIFE SECTION 1 - TYPES OF POLICIES EXAM

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TX - LIFE SECTION 1 - TYPES OF POLICIES EXAM

QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -26 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Level Term

Answer:

A type of insurance where the premium is guaranteed to be the same for a given period of years. The most common terms are 10, 15, 20, and 30 years

Question 2: Whole Life

Answer:

a life policy that runs for the insured's life until death or the ultimate age on the mortality table being used; premiums for this policy may be paid in full

Question 3: Adjustable Whole Life

Answer:

policies allow holders to manipulate the period of protection, increase, or decrease the face amount, raise or lower the premium amount, and change the length of the premium payment period

Question 4: Deferred Annuity

Answer:

an annuity that commences only after a lapse of some specified time after the final purchase premium has been paid

Question 5: Refund

Answer:

Provides annuity payments for the annuitant's lifetime with the guarantee that in no event will total income be less than the purchase price of the contract

Question 6: Variable Whole Life

Answer:

a permanent life insurance policy with an investment component; has cash value account, which is invested in a number of sub-accounts available in the policy.

Question 7: Life Income

Answer:

A settlement option that provides payment during the entire life of the payee.

Question 8: Annual Renewable Term (ART)

Answer:

A form of term life insurance tat offers a guarantee of future insurability for a set period of years, although premiums are paid every year on the basis of a one-year contract

Question 9: Universal Life

Answer:

a type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element, which is invested to provide a cash value buildup

Question 10: Accumulation Units

Answer:

the shares you own in the separate account funds of a variable annuity during the period you're putting money into your annuity

Question 11: Survivorship Life

Answer:

A type of variable life insurance policy that covers two individuals and pays a death benefit to a beneficiary, only after both people have died; does not any benefit when the first policyholder dies.

Question 12: Joint Life

Answer:

Payments continue to two annuitants for only as long as both live; payment stops entirely when the first annuitant dies; there is no survivorship

Question 13: Annuities

Answer:

1) An amount of money payable yearly or at other regular intervals.2) An agreement by an insurer to make periodic payments that continue during the lifetime of the annuitant(s) or for a specified period

Question 14: Variable/Universal Life

Answer:

a type of life insurance that builds cash value; with a typical whole life policy, the death benefit is limited to the face amount specified in the policy, and at endowment age, the face amount is all that is paid out

Question 15: Limited Pay

Answer:

a permanent life insurance policy which premiums are paid for a specified number of years or to a specified age of the insured.

Question 16: Tax Deference

Answer:

refers to investments on which applicable taxes are paid at a future date instead of in the period in which they are incurred

Question 17: Variable Annuities

Answer:

an annuity contract in which the rate of return earned by the separate account is a variable amount.

Question 18: Joint and Survivor Life

Answer:

Payments are made to two annuitants with the survivor continuing to receive payments after the first annuitant dies

Question 19: Returning of Premium

Answer:

a brand name for a type of term life insurance policy that returns the premium paid for the coverage if the insured party survives the policy's term

Question 20: Decreasing Term

Answer:

Term insurance whose amount of coverage starts out at the full amount, then gradually decreases until the expiration date of the policy; the cheapest type of insurance with no cash value and cannot be renewed; often used as mortgage protection insurance

Question 21: Immediate Annuity

Answer:

an annuity contract that is purchased with a single lump-sum payment and in exchange, pays a guaranteed income that starts almost immediately

Question 22: Fixed Annuities

Answer:

a type of annuity contract that allows for the accumulation of capital on a tax-deferred basis

Question 23: Life Income w/ Period Certain

Answer:

Annuity that guarantees regular payment of a certain sum for the life on the annuitant

Question 24: Payout Options

Answer:

A payout is the expected financial return from an investment over a given period of time

Question 25: Term Insurance

Answer:

Life insurance that normally does not have cash accumulation and is issued to remain in force for a specified period of time, following which it is subject to renewal or termination; considered to be temporary coverage