Which of the following life insurance options provides coverage at a fixed rate for a limited period of time?

What type of life insurance is interest sensitive?

Current assumption whole life insurance, which is also known as fixed premium universal life or interest-sensitive whole life, is a variation of universal life insurance. It involves fixed premiums and fixed death benefits, and, as in other universal life policies, its growth in cash value depends on market conditions.

Which of the following life insurance policies would be considered interest sensitive?

Universal Life is a type of Whole Life insurance and is sometimes referred to on the exam as "interest sensitive" whole life. Universal Life policies have a cash value with a minimum guaranteed interest rate and an excess current interest rate.

Which of the following types of insurance policies would provide the greatest amount of protection?

A Term policy, since it is the most inexpensive type of insurance, would provide an applicant the greatest amount of protection (face amount) on a temporary basis.

What type of insurance offers permanent life coverage?

Whole life insurance is the most common type of permanent life insurance, according to the Insurance Information Institute (III). Typically, a whole life policy's premiums and death benefit stay fixed for the duration of the policy. Whole life policies have a guaranteed rate of return, according to Life Happens.

What different types of life insurance are there?

Is life insurance a fixed rate?

In addition to life-long coverage, the cost of Permanent Life Insurance is set at level premiums (also referred to as fixed rates). Level premiums ensure the amount you pay towards your policy will remain unchanged after you secure a policy, so long as you make your premium payments as scheduled.

Which of the following is an example of limited pay life policy?

Limited Pay Life policies, such as LP65 and 20-Pay Life, are variations of Whole Life or Straight Life. ... However, Term has no cash value, so the answer is Whole Life, which is the most inexpensive type of permanent insurance and is required to have a cash value after the third policy year.

What is fixed UL insurance?

Fixed universal life provides flexible premium payments and reliable cash value growth tied to a fixed interest rate, offering stable growth over time. Because these policies have a guaranteed crediting rate, you are not subject to investment risk and your cash value accumulates regardless of market fluctuations.

Do you need life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium What kind of policy is needed?

Limited Payment Whole Life If you want to pay premiums for a limited time the limited payment whole life policy gives you lifetime protection but requires only a limited number of premium payments.

What are the 3 types of life insurance?

There are three main types of permanent life insurance: whole, universal, and variable.

What is permanent term life insurance?

Permanent life insurance is a type of life insurance policy that doesn't expire as long as you continue to pay the premiums. ... When shopping for coverage, your two main options are term and permanent life insurance. Term life lasts for a certain period of time, while permanent life insurance provides lifelong coverage.

How does permanent life insurance work quizlet?

The life insurance company will absorb the cash value, and your beneficiary will be paid the policy's death benefit. Unlike term life, which pays a death benefit if you die sometime within the policy's term, permanent life insurance (such as whole life) covers you no matter when you die.

Which of the following types of insurance policies is most commonly used in credit life insurance?

Credit life insurance and credit disability insurance are the most commonly offered forms of coverage. They also may go by different names. For example, a credit life insurance policy might be called "credit card payment protection insurance," "mortgage protection insurance" or "auto loan protection insurance."

What are 4 types of whole life policies?

What is the most common type of life insurance?

Whole life insurance is the most common type of permanent insurance policy. In addition to providing cash benefits to your beneficiaries upon your death, the coverage comes with guaranteed cash value during the life of the policy.

Which of the following life insurance policies will build up cash value the fastest quizlet?

Limited pay whole life policies grow cash value faster than ordinary (straight) whole life policies because the premium paying period is restricted to a limited number of years. In this example, the premium paying period is restricted to 25 years.

Which type of life insurance generates immediate cash value?

The only life insurance policies that have an immediate cash value are single premium paid up policies.

What kind of policy provides insurance for the loan amount and decreases as the loan is repaid?

Credit life insurance is a type of life insurance policy designed to pay off a borrower's outstanding debts if the borrower dies. The face value of a credit life insurance policy decreases proportionately with the outstanding loan amount as the loan is paid off over time, until both reach zero value.

What is interest sensitive?

Interest sensitive assets are financial products whose features and characteristics or their secondary market price are vulnerable to changes in interest rates. The adjustable-rate mortgage is an example. Banks and their customers both are affected by interest-sensitive assets.