Which of the following life insurance policies allows a policyowner to take out a loan?
Asked by: Ara Blanda | Last update: February 11, 2022Score: 4.2/5 (27 votes)
Automatic Premium Loan (APL) Provision: A permanent life insurance policy non-forfeiture provision that allows an insurer to automatically pay an overdue premium for a policyowner by making a loan against the policy's cash value as long as the cash value equals or exceeds the amount of the premium due.
Which of the following life insurance policy allows the policyowner to take out a loan from the policy's cash value?
Both the universal life policy and whole life policy allow withdrawals or loans against the cash value of the policy. Another type of insurance, variable life, offers additional investment options in separate accounts. It also requires that the policy owner take time to manage the investments.
Can a life insurance policyowner take out a policy loan?
As cash value builds in a whole or universal life insurance policy, policyholders can borrow against the accumulated funds. ... Something else to know: This loan isn't taking money from your own cash value. “You are actually borrowing from the insurance company and using your policy's cash value as collateral,” says Reich.
Which of these types of life insurance allows the policyowner?
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? A life insurance policy that has a level premium but allows the policyowner to choose from a selection of investment options is known as Variable Life.
What type of life insurance policy allows a policyowner the choice of investments along with flexible premium payments?
Universal life insurance is a type of permanent life insurance that allows you to build cash value, withdraw funds, and may have basic investment options. What is unique about this type of insurance is that it offers flexible premiums, giving the policy owner some ability to vary premium payments as income changes.
Life Insurance Loans Simplified - Learn How To Borrow Against A Policy
What is payable to the policyowner?
waive the premium payments in the event the insured becomes totally disabled. What is payable to a policyowner if a whole life policy is surrendered prior to its maturity date? The loan value. The cash value. The face amount minus any past due premiums and outstanding loans.
Which life insurance policy allows the policyowner to choose where they want their funds invested?
Variable life insurance policies permit policyowner's to choose where they want premiums invested.
What kind of special needs would a policyowner require with an adjustable life insurance policy?
What kind of special need would a policyowner require with an Adjustable Life insurance policy? As financial needs and objectives change, the policyowner can make adjustments to the premium and/or face amount. does not guarantee a return on investment accounts.
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."
Which of the following would help prevent a universal life policy from lapsing?
Which of the following would help prevent a universal life policy from lapsing? The policy contains sufficient cash value to cover the cost of insurance. All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
What limits the amount that a policyowner may borrow from a whole life insurance policy?
What limits the amount that a policyowner may borrow from a whole life insurance policy? Cash value - The amount available to the policyowner for a loan is the policy's cash value. ... A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force.
When calculating the amount a policyowner may borrow from a variable life policy?
When calculating the amount a policyowner may borrow from a variable life policy, what must be subtracted from the policy's cash value? The cause of loss insured against. Be fined a sum of $1,000.
Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited?
An Accelerated Death Benefit (ADB) allows a life insurance policy owner to receive a portion of their death benefit from their insurance company in advance of their death. In most cases, the policyholder must be terminally ill, usually with a life expectancy of two years or less.
Which life insurance policy option allows the policyowner to have coverage equal to the net death?
Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. The policy is calculated from the insured's attained age.
Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund?
The free look period is a required period of time, typically 10 days or more, in which a new life insurance policy owner can terminate the policy without penalties, such as surrender charges.
What is a juvenile life insurance policy?
Juvenile life insurance is permanent life insurance that insures the life of a child (generally under age 18). It is a financial planning tool that provides a tax advantaged savings vehicle with potential for a lifetime of benefits.
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 policies allows for a flexible premium?
Universal life insurance policies offer flexible premiums that may allow you to adjust how much you'll pay each year by accessing some of the policy's cash value (though you will need to pay the minimum premium amount or the policy will lapse).
Which of the following is usually true of a participating life insurance policy?
Which of the following is usually true of a participating life insurance policy ? Pays dividends to the policy owners. An agent accepts a payment after 35 days it is due , telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority ?
Why would a policyowner purchase a term rider for their existing policy?
The term insurance is renewable annually. ... An additional life insurance rider allows the policyowner to purchase additional participating paid-up insurance for an additional premium (called paid-up additions) that increases the death benefit and accelerates the cash value growth, of an insurance policy.
What type of life insurance incorporates flexible premiums and an adjustable death benefit?
Variable universal life incorporates the flexibility of universal life and the investment features of variable life. Like universal life, it offers flexible premium payments, an adjustable death benefit and may offer either a level or an increasing death benefit option.
Which type of policy pays a benefit if the insured goes blind?
Accidental Death and Dismemberment Insurance. Also known as AD&D, this type of insurance pays out if the insured dies, becomes blind or is dismembered (loses a limb) in a covered accident.
What kind of life insurance offers the policyowner a cash value that is invested in a separate account?
Variable life insurance policies permit policyowner's to choose where they want premiums invested. Premiums for variable products are invested in the insurer's separate account. These are all characteristics of variable life insurance. Universal life and variable universal life insurance have flexible premiums.
What Nonforfeiture option allows the policyowner to receive the policy's cash value?
What nonforfeiture option allows the policyowner to receive the policy's cash value? The cash surrender value allows the policyowner to receive the policy's cash value.
Which of the following are the features of a variable life insurance policy quizlet?
Variable life policies have fixed, level premiums. Variable life policies guarantee a minimum death benefit, which is why premiums are fixed and level.