#1
Which type of life insurance provides coverage for a specific period?
Term life insurance
ExplanationProvides coverage for a set period of time.
#2
What is the primary benefit of whole life insurance?
Lifetime coverage
ExplanationProvides coverage for the insured's entire life.
#3
What distinguishes variable life insurance from other types?
Death benefit varies based on investment performance
ExplanationDeath benefit amount fluctuates depending on the performance of investments.
#4
In universal life insurance, what is the main characteristic of the cash value component?
Can be withdrawn or borrowed against
ExplanationPolicyholders can access funds by withdrawing or borrowing against the cash value.
#5
What is the main advantage of term life insurance over whole life insurance?
Lower premiums
ExplanationOffers lower initial premiums compared to whole life insurance.
#6
Which of the following is a characteristic of a renewable term life insurance policy?
Can be converted to a whole life policy
ExplanationCan be changed into a permanent life policy without a medical exam.
#7
What is the main characteristic of a participating whole life insurance policy?
Allows policyholders to participate in company profits
ExplanationPolicyholders can receive dividends from the insurer's profits.
#8
Which of the following is a feature of an adjustable life insurance policy?
Allows policyholders to change coverage amounts and premium payments
ExplanationEnables policyholders to adjust coverage and premiums over time.
#9
Which of the following statements best describes term life insurance?
Provides coverage for a specific period
ExplanationCovers the insured for a defined period, typically with fixed premiums.
#10
What feature of universal life insurance allows policyholders to adjust their premiums and death benefits?
Flexible premiums and coverage
ExplanationPolicyholders can modify premiums and death benefits as needed.
#11
Which type of life insurance offers the potential for higher returns but also involves investment risks?
Variable life insurance
ExplanationAllows policyholders to invest premiums in various accounts, with associated risks and rewards.
#12
What is the primary purpose of the cash value component in permanent life insurance policies?
To offer policy loans and withdrawals
ExplanationServes as a source for policy loans and withdrawals during the insured's lifetime.
#13
What is a characteristic of a variable universal life insurance policy?
Policyholder's ability to invest premiums in various accounts
ExplanationCombines the flexibility of universal life with the investment options of variable life insurance.
#14
Which type of life insurance offers the most flexibility in premium payments?
Universal life insurance
ExplanationProvides the greatest flexibility in adjusting premiums.