Question: What are the two components of a universal policy

Answer: insurance and cash account

Question: A universal life insurance policy is best describes as an

Answer: annually renewable term policy with a cash value account

Question: An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?

Answer: limited-pay life

Question: The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

Answer: convertible term policy

Question: Which of the following is incorrect regarding a $100,000 20-year level term policy?

Answer: at the end of 20 years, the policy’s cash value will equal $100,000

Question: Which of the following policies would be classified as a traditional level premium contract?

Answer: straight life

Question: An individual purchased $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

Answer: $100,000 (in joint life policies, the DB is paid upon the first death only)

Question: Which of the following is an example of a limited-pay life policy?

Answer: life paid-up at age 65

Question: What is true regarding a policy issued to a labor union insuring members of the organization for the benefit of persons other than the union or organization?

Answer:

Question: Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?

Answer: joint life - least expensive because premiums are based on average age and it only pays a death benefit at the first death