Which type of life insurance provides coverage for a specific number of years, with no cash value accumulation, and generally the lowest initial premium for a given death benefit?
A. Whole life insurance
B. Term life insurance
C. Universal life insurance
D. Variable life insurance
Source: General insurance principle
Whole life insurance is characterized by which combination of features?
A. Coverage that expires after a set term with no cash value
B. Lifelong coverage, level premiums, and a guaranteed cash value that grows over time
C. Coverage where the death benefit and cash value both fluctuate directly with a securities subaccount
D. Coverage available only to employer groups, never to individuals
Source: General insurance principle
Universal life insurance is best described as a permanent policy offering which distinguishing feature compared to traditional whole life?
A. No death benefit, only a savings account
B. Fixed premiums that can never be adjusted for the life of the policy
C. Flexible premiums and an adjustable death benefit, with cash value credited interest based on the policy's crediting rate
D. Coverage that automatically terminates at age 21
Source: General insurance principle
A life insurance policy's 'incontestability clause' generally provides that after the policy has been in force for a specified period, typically two years, the insurer:
A. May cancel the policy at will for any reason
B. May no longer contest the validity of the policy based on misstatements in the application, except for fraud in most states
C. Must double the death benefit automatically
D. May increase the premium without notice
Source: General insurance principle
In a life insurance policy, the 'contestable period' is the timeframe during which the insurer may investigate and potentially deny a claim based on:
A. The beneficiary's credit score
B. Material misrepresentations made by the applicant on the application
C. The insured's choice of funeral home
D. Changes in interest rates after issue
Source: General insurance principle
