Life Insurance Part II

With a modified premium whole life contract, premium payments
a. are the same for the life of the contract
b. are higher in the early ears of the contract
c. are lower in the early years of the contract
d. during the life of the contract are variable according to the policyowner's ability to pay

When a reduced paid-up policy is purchased
A.   The amount of the protection will not vary during the life of the new policy
B.   the premium is computed at the insured's original age
C.   the policyowner's future premiums will be smaller than the old policy's premiums
D.   the policyowner must bear a greater share of the insurance company's operating expenses

Teresa begins receving monthly checks after her husband's death.  A year later Teresa passes away and her daughter receiveds monthly checks until the proceeds are exhausted.  This is the 

A.   joint and survivor life income option
B.   refund annuity option
C. life income certain option
D.   straight life income option

Jim wants his wife Dora to receive payments for life. If Dora dies before 10 years have passed, their daughter Elaine will continue to receive the payments until the end of the 10 year period.  Jim's settlement choice is the 

A.   refund annuity option
B.   joint and survivor life income option
C.   life income certain option
D.   straight life income option

When Sam, a widower, dies, his sons Jack and Mack share a monthly check of $2000.  Mack dies and Jack continues to receive a check for $1000 until he dies.  This life income option is called

A.   straight life income option
B.   life income certain option
C.   joint and survivor life income option
D.   refund annuity option

Which statement best describes the term 'reserve'?
A.   that amount that when decreased by future death claims, will enable the company to make a profit
B.   that amount, required by law, that the company must hold in reserve to accumulate interest and be paid to stockholders and policyowners
C.   That amount, that when increased by future premiums on outstanding policies, and interest on those premiums, will enable the company to meet future death claims.
D.   that amount, required by law, that the company must hold in reserve to pay only cash value accumulations on permanent insurance policies

If a policy lapses, the company
A.   will automatically reinstate the accidental death benefit if the original policy contained it.
B.   usually includes the accidental death benefit, even if the provision was not previously included
C.   cannot refuse to reinstate the accidental death benefit if requested to do so by the policy owner
D.   can refuse to reinstate the accidental death benefit

The increasing term rider is usually used to
A.   provide that the amount of premiums paid will be added to cash values when the whole life policy is surrendered at retirement
B.   guarantee that the beneficiary will receive either the cash values or the amount of premiums paid in addition to the policy death proceeds
C.   guarantee that the policyowner will receive either the cash value of the amount of premiums paid when the insured dies and the beneficiary receives the death proceeds.
D.   provide for payment of premiums in the event the policy is in the grace period when the insured dies

An extra premium charged for the waiver of premium rider

A.   must be paid on a monthly basis
B.   applies to the policy's cash value
C.   does not apply to the policy's cash value
D.   earns interest

For the insurance company to pay the accidental death benefit, most companies require that the insured
A.   die within 90 days of the accident
B.   has the policy in force at least two years prior to the accident
C.   die instantly in the accident
D.   die within 10 days of the accident

With which of the following may a 20 year term rider be combined
A.   30 year term policy
B.   10 pay life policy
C.   30 pay life policy
D.   20 year term policy