1.For review, identify life policy provides temporary protection for a stated period and normally no cash value.
Term life provides death protection for a specified period and normally does not build cash value.
Example: A client or producer applies this rule in a policy situation. The correct concept is Term life. Term life provides death protection for a specified period and normally does not build cash value.
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2.For review, identify term policy keeps the death benefit level during the term.
Level term maintains a level face amount for the stated term.
Example: A client or producer applies this rule in a policy situation. The correct concept is Level term. Level term maintains a level face amount for the stated term.
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3.For review, identify term policy is commonly matched to a mortgage balance that declines over time.
Decreasing term is often used for debts such as mortgages because the death benefit declines over time.
Example: A client or producer applies this rule in a policy situation. The correct concept is Decreasing term. Decreasing term is often used for debts such as mortgages because the death benefit declines over time.
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4.For review, identify term policy typically renews each year with premiums that generally rise with attained age.
Annual renewable term renews yearly and premiums generally increase as the insured ages.
Example: A client or producer applies this rule in a policy situation. The correct concept is Annual renewable term. Annual renewable term renews yearly and premiums generally increase as the insured ages.
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5.Review scenario 15: A convertible term provision allows the owner to:
Conversion permits a change from term to permanent coverage without proving insurability again, subject to the contract.
Example: A client or producer applies this rule in a policy situation. The correct concept is Convert term coverage to permanent insurance without new evidence of insurability, subject to policy terms. Conversion permits a change from term to permanent coverage without proving insurability again, subject to the contract.
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6.For review, identify policy is designed for lifetime protection with fixed premiums and guaranteed cash values.
Traditional whole life combines permanent protection, level premiums, and guaranteed cash values.
Example: A client or producer applies this rule in a policy situation. The correct concept is Whole life. Traditional whole life combines permanent protection, level premiums, and guaranteed cash values.
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7.Review scenario 17: A whole life policy paid up after 20 years is an example of:
Limited-pay whole life compresses premium payments into a shorter period while coverage can continue for life.
Example: A client or producer applies this rule in a policy situation. The correct concept is Limited-pay whole life. Limited-pay whole life compresses premium payments into a shorter period while coverage can continue for life.
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8.For review, identify permanent policy is funded with one large premium at issue.
Single-premium whole life uses one lump-sum premium to fund permanent coverage.
Example: A client or producer applies this rule in a policy situation. The correct concept is Single-premium whole life. Single-premium whole life uses one lump-sum premium to fund permanent coverage.
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9.For review, identify policy is known for flexible premiums and an adjustable death benefit, subject to policy limits.
Universal life is a flexible-premium permanent policy with adjustable death benefit features.
Example: A client or producer applies this rule in a policy situation. The correct concept is Universal life. Universal life is a flexible-premium permanent policy with adjustable death benefit features.
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10.For review, identify policy places cash values in separate accounts and exposes them to investment performance.
Variable life uses separate accounts; cash values vary with investment performance and are not guaranteed like traditional whole life.
Example: A client or producer applies this rule in a policy situation. The correct concept is Variable life. Variable life uses separate accounts; cash values vary with investment performance and are not guaranteed like traditional whole life.
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