Life Insurance Basics – License Exam Flashcards

Answer

Term life insurance. It provides pure death protection with no cash value accumulation, and coverage expires at the end of the term.

Answer

Whole life insurance. Premiums are fixed, the death benefit is guaranteed, and cash value grows at a guaranteed rate tax-deferred.

Answer

Universal life allows the policyowner to vary the amount and timing of premium payments within certain limits, while whole life requires fixed scheduled premiums.

Answer

Cash values are invested in separate accounts chosen by the policyowner, such as stock or bond sub-accounts, meaning the cash value and death benefit can fluctuate based on investment performance.

Answer

An endowment policy pays the face amount either upon the insured's death or when the policy matures (reaches its endowment date), whichever comes first.