Kentucky Life Insurance Exam Prep| Questions and Verified Answers| 100 % Correct| Grade A (Latest 2024/ 2025 Update) Q: Universal Life Insurance Answer: Flexible premium, adjustable death benefits, accumulates cash values: earlier models have frontend load, later models have back end load. Insurance costs are debited and guaranteed and excess interest are credited. Q: Universal Life Death Benefit Option A Answer: Level death benefit throughout life of policy (can be increased with proof of insurability, can also be reduced.) Q: Universal Life Death Benefit Option B Answer: Increasing death benefit made up of the policy face value plus cash value account Q: Risk Corridor Answer: The minimum separation between the cash value and death benefit. Q: Partial Withdrawal Answer: Permanent deduction of the cash value and cannot be reversed, no interest credited or paid, repayment treated as premium payment Q: Cash Value of ULP $0 Answer: Contract expires, policy goes into grace period, Q: Variable Life Answer: Securities based, whole life, NASD registration required, separate account holds assets, fluctuating death benefit but never below a guaranteed minimum (face amount of policy,) but no guaranteed CV, traditionally a fixed premium Q: Variable Universal Life Answer: Flexible premiums, choice of death benefits (A or B,) NASD registration required, separate account holds assets, fluctuating death benefit but never below a guaranteed minimum (face amount of policy,) but no guaranteed CV Q: Indeterminate Premium Policies Answer: Low current premium for first 3 years, premium is adjusted at end of 3 year duration based on investment return, mortality, and expenses, which can result in increase or decrease of premium (within a stated maximum) Q: Level Term Insurance Answer: Term insurance where the face value of policy remains the same from the date the policy is issued until the date the policy expires. Q: Decreasing Term Answer: A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy. Q: Convertible Term Insurance Answer: Term to Permanent, no requirement of proof of insurability, most people convert at attained age to avoid paying back premiums, time-limit varies by policy Q: Renewable Term Answer: Insurance which can, at the election of the policyowner, be renewed at the end of a term attained age without evidence of insurability within a time limit (commonly 30 days) Q: Interim Term Answer: Interim term coverage provides instantaneous coverage and is intended for people who plan on purchasing permanent life insurance coverage within one year, no proof of insurability, at attained age, built in time limit Q: Family Income Policies Answer: Income is paid upon death of family breadwinner, combination of permanent and decreasing term coverage, children are added without additional premium and can convert at specified age without proof of insurability. Benefit duration lasts not starting from death but from when policy was purchased. Q: Family Maintenance Policies Answer: Combination of level term and permanent policies, income provided starting from insured's death Q: Jumping Juvenile Policy Answer: Purchased by parent, the child reaches age 21, coverage increases to five times the face amount, premiums remain the same and no evidence of insurability is required. Q: Industrial Life Insurance Answer: A type of insurance in which the policies are sold in small amounts and an agent of the company collects the premiums at the insured's home usually monthly or weekly (by home service companies) Q: Monthly Debit Ordinary Policy Answer: