Whole Life Insurance 2020

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Question 1 of 10

1. Question
Which of the following statements is FALSE about cash value?
- Term life policies have cash value.
- Whole life policies have cash value.
- Cash value can be borrowed.
- When the insured on a whole life policy dies, the beneficiary will only receive the death benefit—but not the cash value.
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Question 2 of 10

2. Question
Whole life is considered to be which type of life insurance?
- Universal
- Temporary
- Permanent
- Term
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Question 3 of 10

3. Question
For a whole life policy, if the insured is still alive at a specific age (usually 100 or 120), the policy’s cash value will reach its death benefit, and the policyowner, therefore, will receive an amount equal to the death benefit. This specific age is called what?
- Endowment age
- Old age
- Ancient age
- Survivor age
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Question 4 of 10

4. Question
Which of the following is NOT true regarding a continuous premium whole life policy?
- Compared to limited payment whole life, the monthly premiums are lower.
- The face amount (i.e. death benefit) is level throughout the life of the policy.
- This type of policy does not have cash value.
- Premiums must be paid until the insured dies, or until the insured reaches the policy’s endowment age, whichever is first.
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Question 5 of 10

5. Question
Stanley wants to purchase a whole life policy in which he can stop paying the premiums when he plans to retire 20 years from now. Which type of whole life policy should he purchase?
- Limited payment
- Decreasing term
- Variable premium
- Continuous premium
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Question 6 of 10

6. Question
Which of the following statements is FALSE regarding a single premium whole life policy?
- The face amount (i.e. death benefit) is level throughout the life of the policy.
- This type of policy has cash value.
- Premiums must be paid until the insured dies, or until the insured reaches the policy’s endowment age, whichever is first.
- Once the single premium is paid, the policy is completely paid up forever, and a death benefit is guaranteed to be paid to the beneficiary no matter when the insured dies.
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Question 7 of 10

7. Question
An index whole life policy earns interest and builds cash value based on what?
- The performance of a stock or bond market index, such as the S&P 500 ®
- The performance of individual stocks picked by the policyowner
- The performance of individual bonds picked by the policyowner
- The interest rate of the 6-month treasury bill
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Question 8 of 10

8. Question
Why is an index whole life policy considered a fixed life insurance product?
- It has a guaranteed cash value.
- Because it is very risky, and the policyowner can lose the money he or she puts into the policy.
- The cash value always stays the same.
- The rate of cash value growth never changes.
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Question 9 of 10

9. Question
With a variable whole life policy, the insurer takes premiums received and deposits them into
- a separate account, in which the policyowner has the option of having the premiums invested in stocks and other risky investment choices.
- its general account, in which the policyowner does not have the option of having the premiums invested in stocks and other risky investment choices.
- an increasing term policy.
- a decreasing term policy.
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Question 10 of 10

10. Question
Regarding all whole life insurance policies, as long as the policyowner pays the required premium and the policy remains active, the death benefit
- is guaranteed to increase each year.
- typically stays the same and is guaranteed.
- can fluctuate up or down monthly.
- can fluctuate up or down yearly.
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