#1
Which of the following is not a type of life insurance ownership structure?
Group Ownership
ExplanationGroup Ownership is not a typical life insurance ownership structure.
#2
In which ownership structure is the policy owned by a single person?
Sole Ownership
ExplanationSole Ownership involves a single individual owning the life insurance policy.
#3
What is the primary purpose of naming a beneficiary in a life insurance policy?
To designate who will receive the death benefit
ExplanationNaming a beneficiary in a life insurance policy specifies the recipient of the death benefit.
#4
Which of the following is true regarding the cash value component of permanent life insurance policies?
It can be accessed by policy loans or withdrawals
ExplanationThe cash value in permanent life insurance can be accessed through policy loans or withdrawals.
#5
Which of the following statements about term life insurance is true?
It provides coverage for a specified term only
ExplanationTerm life insurance provides coverage for a specific term or duration.
#6
Which of the following statements about Joint Ownership of life insurance is true?
Each owner can designate a beneficiary
ExplanationIn Joint Ownership, each owner has the right to designate a beneficiary for the policy.
#7
What is a characteristic of Survivorship Life Insurance?
It pays out after the last insured individual dies
ExplanationSurvivorship Life Insurance pays the death benefit after the death of the last insured person.
#8
In which ownership structure of life insurance do all owners share the policy's cash value and death benefit?
Joint Ownership
ExplanationJoint Ownership involves all owners sharing the life insurance policy's cash value and death benefit.
#9
What is the primary benefit of a Revocable Life Insurance Trust (RLIT)?
It allows the trust creator to change beneficiaries
ExplanationA Revocable Life Insurance Trust (RLIT) permits the trust creator to change beneficiaries as needed.
#10
Which of the following is a feature of Universal Life Insurance?
Policyholders can choose their investment options
ExplanationUniversal Life Insurance allows policyholders to choose their investment options within the policy.
#11
Which of the following is a potential benefit of an Irrevocable Life Insurance Trust (ILIT)?
Removes the life insurance policy from the insured's estate
ExplanationAn Irrevocable Life Insurance Trust (ILIT) removes the life insurance policy from the insured's estate for potential estate tax benefits.
#12
Which of the following is a characteristic of a Whole Life Insurance policy?
Policyholders receive dividends from the insurance company
ExplanationWhole Life Insurance policyholders receive dividends from the insurance company.
#13
Which of the following is a characteristic of Variable Life Insurance?
Policyholders bear the investment risk
ExplanationVariable Life Insurance policyholders bear the investment risk associated with the policy's cash value.
#14
Which of the following statements is true regarding the cash value component of whole life insurance?
It can be accessed through policy loans or withdrawals
ExplanationCash value in whole life insurance can be accessed through policy loans or withdrawals.
#15
What is the primary advantage of variable life insurance?
Policyholders have the potential for higher returns based on investment performance.
ExplanationThe primary advantage of variable life insurance is the potential for higher returns based on the policy's investment performance.