Variable universal life DOES provide with the policyowner with access to cash values via policy loans and withdrawals. The correct answer is: They have no provision for policy loans and withdrawals. An insured filed a claim with her insurance company and submitted all the proof of loss requested.
What is the difference between Universal and variable life insurance?
While a universal life insurance product pays interest, a variable universal life insurance contract is invested in variable sub accounts. There are advantages and disadvantages to each type. There are advantages and disadvantages to each type.
Is variable universal life insurance a good investment?
Variable universal life insurance is a good investment if you’ve already maxed out your retirement accounts and still have excess cash you’d like to shelter from taxes. Otherwise, you may be better off investing in simpler, less expensive life insurance products, such as term or whole life, and invest the difference into an index fund through a brokerage.
Is variable universal life insurance better than whole life?
Universal and variable life insurance policies, like whole life, combine life insurance protection with the opportunity to build cash value on a tax-favored basis. Better than whole life, these modern policies provide you with desirable flexibility and control.
Is an Universal Life Policy a bad idea?
Universal Life Insurance is not a bad idea, unless it is not a suitable product for your need. Universal Life can be a good solution for those who want permanent coverage with low cash value and at the lowest possible price. Because it is flexible, Universal Life is also a good "lifetime" plan that can be adjusted to suit each stage of life.
What is variable universal life insurance and how does it work?
A variable universal life policy provides permanent life insurance protection with a cash value component. Premiums are flexible and can be raised or lowered within certain limits. You also have investment options: market-based securities that can go up or down in value.
Which statement concerning an adjustable life insurance policy is false?
Which statement concerning an adjustable life insurance policy is FALSE? Initial premium is lower than for an equivalent amount of term insurance -Correct. The initial cost of whole life insurance is actually HIGHER than an equivalent amount of term insurance.
What is variable life insurance quizlet?
What is Variable Life? -Permanent life insurance with investment flexibility. -Level premium. -Policyholder's separate investment account for cash value (CV)
Which of the following would help prevent a universal life policy?
Which of the following would help prevent a universal life policy from lapsing? Reasons: The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
What is an accurate description of the premium in a graded premium life insurance policy?
The face amount is determined by the outstanding loan balance. Which is an accurate description of the premium in a graded premium life insurance policy? Annual increase in premium for a stated number of year then level off for the remainder of the contract.
What is a variable insurance policy?
A variable life insurance policy is a contract between you and an insurance company. It is intended to meet certain insurance needs, investment goals, and tax planning objectives. It is a policy that pays a specified amount to your family or others (your beneficiaries) upon your death.30-Oct-2018
What is universal and variable life insurance quizlet?
-a whole life policy pays a guaranteed (fairly low) rate of return, while universal life policies may adjust the interest rate that is paid on the policy each year. -Variable life insurance offers fixed premiums, a flexible death benefit and the ability to earn a variable rate of return.
How is a variable universal life insurance policy different from a universal life insurance policy quizlet?
Universal life gives the policyholder the flexibility to skip some premium payments. Variable life invests premiums in a separate account and typically invests in equities, whereas both whole life and universal life invest premiums in the general account, which must be heavily invested in fixed income securities.
How does a whole life insurance policy work?
In a whole life policy, the life insurer assumes the investment risk by guaranteeing a minimum cash value growth. By separating the savings component and the death benefit component, the life insurer transfers the investment risk of the VUL policy to the insured.
How does Vul insurance work?
Like universal life insurance, VUL insurance combines a savings component with a separate death benefit, allowing for greater flexibility in managing the policy. Premiums are paid into the savings component.
What happens when you separate the savings component and the death benefit component?
1 . By separating the savings component and the death benefit component, the life insurer transfers the investment risk of the VUL policy to the insured.
What is VUL insurance?
What Is Variable Universal Life (VUL) Insurance? Variable universal life (VUL) is a type of permanent life insurance policy with a built-in savings component that allows for the investment of the cash value. Like standard universal life insurance, the premium is flexible. VUL insurance policies typically have both a maximum cap ...
Is the return to the cash component guaranteed?
As a result, the return to the cash component is not guaranteed year after year. VUL insurance policies will have a maximum cap as well as a floor (usually 0%) on the returns that the investment part receives.
Is Vul insurance flexible?
Like standard universal life insurance, the premium is flexible. VUL insurance policies typically have both a maximum cap and minimum floor on the investment return associated with the savings component. VUL insurance has investment subaccounts that allow for the investment of the cash value.
What comprises most of a life insurance company's general account?
S&P 500 index 2. Conservative investments like bonds 3. Aggressive stocks and bonds 4. Company stock
What privilege does the insurer have in order to balance this?
In insurance policies where contract ambiguities are automatically ruled in the favor of the insured, what privilege does the insurer have in order to balance this? 1. The right to determine the wording of a policy 2. The right to refute the rulings 3. The right to revoke the policy 4. The right to raise premiums as a result of court rulings
What is deferred annuity?
A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? 1. The surrender value will not be more than 80% of the cash value in the annuity at the time of surrender. 2. The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges. 3. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. 4. The surrender value will be based on current interest rates.
What is a life insurance premium?
1. Premiums paid by a mother on her son's policy 2. Premiums paid by an employer on the life of a key person 3. Premiums paid by an employer on a $30,000 group term life insurance plan for employees 4. Premiums paid by an individual on his/her own life insurance. 3.
What is joint life annuity?
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a 1. Joint life annuity. 2. Joint and survivor annuity. 3.
Which of the following circumstances would an insurer pay accelerated benefits?
Under which of the following circumstances would an insurer pay accelerated benefits? 1. A couple is nearing retirement and needs a steady stream of income. 2. An insured is looking for a way to put her daughter through college. 3. A couple wants to build a house and would like to make a larger down payment. 4. An insured is diagnosed with cancer and needs help paying for her medical treatment.
Which of the following would not be considered rebating?
Sending a $50 gift certificate to the insured's employee after the insurance has been effected as a thank you for the referral 2. Sharing commission with the insured 3. Giving an applicant a $25 pen with the insurer's logo during the insurance application process 4. Collecting a lower premium than what's specified in a policy as a token of client appreciation
Can a D family member convert to permanent life insurance?
D Family members are not provided any rights. They can convert their coverage to permanent life insurance without evidence of insurability. The following are features of the Indexed Universal Life EXCEPT. A Adjustable death benefit. B Policy's cash value is dependent on the performance of the equity index.
Is the cost of coverage deductible?
D The cost of coverage paid by the employer is tax deductible by the employees. The cost of coverage is a deductible expense by the employer. Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid. A Until the policyowner reaches age 65.
Why is universal life policy called unbundled life policy?
The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the. Cost of Insurance. A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as. Variable life.
What is a whole life policy?
A life insurance policy that provides a policyowner with cash value along with a level face amount is called. Whole life. G purchased a Family Income policy at age 40. The policy has a 20-year rider period.
How long are premiums payable?
Premiums are payable for as long as there is insurance coverage in force. Premiums are payable for as long as there is insurance coverage in force. A Whole Life Insurance Policy endows when the. Cash value equals the death benefit. When a policyowner exchanges a term policy for a whole life policy without providing proof of good health, ...
What is credit life insurance?
Credit Life insurance is. issued in an amount not to exceed the amount of the loan. If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase. A Whole Life Policy with an Other Insured Rider.
Do mortality charges affect investment?
Mortality charges do not impact the investment amount. Interest rates determine cash values. There is a flexible premium payment. All of these are characteristics of an Adjustable Life policy EXCEPT. adjustable premiums. adjustable premium payment period. combination of term and whole life insurance.
Can you adjust death benefit and premium?
Owner can adjust both premium and death benefit. Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract. Owner has the option of converting to term insurance. Premiums are payable for as long as there is insurance coverage in force. Premiums are payable for as long as there is ...