Brain Teasers

  1. Life Insurance provides protection against                         death.  
  2. The sum payable upon the death of the insured is called the
    Death Benefits
  3. Payments made to the policyowner while the insured is still alive are called the
    Living Benefits
  4. The person who controls all rights to the policy while the insured is alive is called the 
  5. The                         receives the death benefit when the insured dies. 
  6. The entity that agrees to pay the benefits cited in the policy is the
  7.                              insurance provides for payment of the face amount at maturity or the insured’s death.
  8. The amount promised to be paid by the insurer to the policyowner at maturity of the policy is called the
  9.                insurance pays the face amount only if the insured dies within a certain period of time.
  10. The different variations of whole life policies differ only with respect to how and when                    are to be paid.
  11. 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
  12. With a                    payment plan, premiums do not change as the insured gets older
    level premium
  13. The amount held in reserve by the insurer is called the policy’s           .
    cash value
  14. The face amount of a whole life policy consists of the                                   and the                            .
    • pure insurance
    • cash value
  15. Any excess premiums the first              years can be used to pay commissions and other sales expenses.
  16. A policy with a face amount of $100,000 that has $25,000 in cash value has                as the amount at risk portion.
  17. 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
  18. If a policyowner cancels his whole life policy, state                  laws state that the accumulated cash value cannot be forfeited.
  19. A “20-pay life” policy has premiums that are payable for      years and then the policy is considered to be         
     paid up
  20. 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.
    • 65
    • 100
  21. 3. A whole life policy that is paid up with only one premium payment is called a                     whole life policy.
  22. The policy that has the largest up front premium but is the least expensive in the long run would be a                     whole life policy
  23. 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
  24. 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
  25. Term insurance policies do NOT accumulate                               .
     cash value
  26. Term insurance has a              initial premium than permanent insurance. 
  27. Three basic types of term insurance are level                  term,           term, and                 term
    • level
    • decreasing
    • increasing
  28. The term policy that provides the same amount of protection throughout the selected term is called                  term insurance
  29.                            term insurance provides coverage that reduces over the policy term. 
  30. 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
  31. A term insurance policy that has a death amount that gets larger as the policy continues is called an                        insurance policy.
    increasing term
  32. A term policy that allows the insured to buy an additional term period of coverage without evidence of insurability is                 term insurance.
  33. 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.
  34. 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
    • re-entry
    • ultimate
  35. A term policy that allows the insured to change to a permanent insurance policy without any evidence of insurability is a                    term insurance policy.
  36. Term insurance may be converted at either the insured’s                  age or at the insured’s                      age, depending on the terms of the policy
    • attained
    • original
  37. A permanent insurance policy specifically set to endow before age 100 is known as an                        policy.
  38. A 30-year endowment policy provides insurance coverage for      years and will endow in         years.
    • 30
    • 30
  39. An endowment policy sold after 1984 is not treated as life insurance for           purposes
  40. Retirement income policies are a combination of an                            and an                      .
    • endowment
    • annuity
  41. If the insured in an endowment policy dies prior to endowment, the beneficiary will receive either the                     or the                                , whichever is greater.
    • death benefit
    • cash value
  42. 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
  43. If an interest-sensitive life policy has a guaranteed rate of 4% and the current interest rate is 7%, the excess interest would be         .
  44. Interest-sensitive life policies have              ,             death benefits. 
    • fixed
    • level
  45. A universal life policy offers                death benefits and a                    premium. 
    • adjustable
    • flexible
  46. The premium paid for a universal life policy is a                premium, or recommended premium payment amount.
  47. Universal life policies allow loans, by borrowing the cash value, or                                of the cash value without borrowing it.
  48. Withdrawals from a universal life policy can either be                or                  and will reduce the                               amount by the amount withdrawn.
    • partial
    • total
    • death benefits
  49. Universal life policies may have either       -end or              -end loads to cover sales and other expenses incurred by the insurer.
    • front
    • back/rear
  50. Universal life Option    provides a level death benefit, and Option     provides an                     death benefit.
    • A
    • B
    • increasing
  51. 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           .
  52. The death benefit of a universal life Option B policy is the                                       plus the                                .
    • face amount
    • cash value
  53. Universal life policies are considered                          , meaning the cash value, expenses, and mortality charges are handled and shown separately.
  54. 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                        .
  55. Variable whole life insurance covers the insured to age        or death, whichever occurs first.
  56. Cash values in a variable whole life policy are invested into a                    account.
  57. There is usually a                        charge for cancellation of a variable whole life policy in the first policy years.
  58. The                           bears the investment risk in a variable life policy. 
  59. 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
  60. Variable life insurance policies must be registered with the             , and the purchaser must be given a                      showing his rights, the risks, the fees, etc.
    • SEC
    • prospectus
  61. 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.
    • joint
    • first-to-die
  62. A                              life policy is one policy that covers more than one person and pays the death benefit after ALL insureds have died.
  63. With a group insurance policy, a                         policy is issued to the policyowner, most often an employer.
  64. Anyone other than the                            may be the beneficiary of a group insurance policy.
  65. 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)
  66. 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.
  67. 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
  68. 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
  69. In a                    group plan, the employees pay all or part of the premium. 
  70. In a                             group plan, the premium is fully paid by the employer.
  71. Medical exams are generally required only if a person applies for coverage in a group policy after their                                  has expired.
    eligibility period
  72. In a contributory plan,            of eligible employees must participate, while in a noncontributory plan must           generally participate in the plan. 
    • 75%
    • 100%
  73. An insured member can usually convert his group term policy to an                         policy. 
  74. The premium for a converted group policy will be based on the insured’s                   age
  75. 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
  76. When each partner buys a policy on the lives of the other partners, the partnership has used a                        plan buy-sell (buyout) agreement.
  77. 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
  78. A corporation would utilize a                                         plan to fund a buyout agreement.
    stock redemption
  79. A plan whereby the employer and employee share the costs of a life insurance policy is known as a(n)                         life insurance plan.
  80. The shared costs of a split-dollar plan include the                      , the                                 , and the                       for life insurance.
    • death benefit
    • living benefit
    • premium
  81. 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 
  82. 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                               .
    • owner
    • annuitant
  83. An annuity provides for                                 of an estate through annuity payments to the annuitant.
  84. The entities that sell annuities are                                          .
     insurance companies
  85.                   annuities earn a stated interest rate, and                           annuities earn a return on investment.
    • Fixed
    • variable
  86. Both fixed annuities and variable annuities are based on                   and                            guarantees from the insurer
    • expense
    • mortality
  87. In a fixed annuity, the insurer bears the                and                         risks. 
    • expense
    • interest
  88. In a variable annuity, the                          bears the investment risk.
  89. 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                              .
    • SEC
    • SEC
    • NASD
    • proscpectus
  90. Premiums on variable annuities are placed into a                             account and converted to                                units
    • separate
    • accumulations
  91. 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
  92. The annuity that will make payments to the annuitant immediately after funding is known as an                    annuity
  93. 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.
  94. The annuity that will begin making payments to the annuitant after more than one payment interval has elapsed is known as a                         annuity
  95. 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.
  96. An annuity paid for with a lump sum is known as a                                         annuity
    single premium
  97. An immediate annuity can only be purchased with a                                            .
    single premium
  98. 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
  99. The premium paying method whereby premiums can vary as to timing and amount is referred to as a                                 annuity.
    flexible premium
  100. . 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
  101. 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
    • life
    • premiums
    • interest
  102. If any payments are still due to be paid out after the annuitant’s death, they will go to the annuitant’s                            .
  103. The                                or                        annuity makes payments for a certain, specified period of time, even if the annuitant dies early.
    • annuity certain
    • period certain
  104. 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
  105. With a                refund annuity, the refund is paid in a lump sum.
  106. With an                           refund annuity, the refund is paid in continued annuity payments. 
  107. An annuity that bases annuity payments on the life of one annuitant is called an                           life annuity
  108. Annuities that base payments on the lives of two or more annuitants and cease when any annuitant dies are known as                          annuities
    joint life
  109. 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
  110. The annuity that combines a life insurance policy with an annuity is a                         annuity.
  111. An additional section or page attached to and made part of a life policy is called a                      
  112. 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
  113. Available term riders include level term,                    term and                      term insurance. 
    • decreasing
    • increasing
  114. The term of these riders cannot exceed the                                  period of the permanent policy.
    premium payment
  115. The rider which increases the amount the beneficiary will receive if the insured dies accidentally is called the                                   rider.
    accidental death benefit
  116. The amount paid to the beneficiary in the event of accidental death is called the                                     .
    principal sum
  117. The amount paid to the insured in the event of accidental dismemberment is referred to as the                             .
    capital sum
  118. 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.
    • double
    • triple
  119. 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
  120. 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
  121. The waiver of premium benefit usually expires at age      or     , unless the insured is receiving benefits from this rider at that time.
    • 60
    • 65
  122. The                         rider pays the insured a monthly income while totally and permanently disabled.
    disability income
  123. The party that owns a juvenile insurance policy is the                of the policy.
  124. 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
  125. The rider that adds term insurance coverage on a husband or wife is the                      rider. 
  126. A                                   may be used to add term insurance on all children in the family.
    children’s rider
  127. Children’s term insurance riders cover all children in the household from        days old to the limiting age specified in the policy
  128. The rider that adds term coverage on the spouse and children would be called the              rider.
Card Set
Brain Teasers
Nevada Life Insurance Basics and Beyond-Traditional Whole Life Products/Term and Endowment/Interest Sensitive and Combination Plan Products/ Group Life and Business Uses of Insurance/ Annuities/Policy Riders