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Planning Intermediate:
Variable and Universal Life Insurance
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1.
Which of the following insurance products does not entail market risk?
Choose wisely. There is only one correct answer.
Universal life
Variable life
Variable universal life
None of the above
Universal life. Universal life is a fixed-interest product, and the insurance company provides a guaranteed minimum return.
2.
Life insurance protection in a cash value policy _______.
Choose wisely. There is only one correct answer.
Costs less than term insurance
Costs more than term insurance
Costs about the same as term insurance
Might cost less or more than term insurance
Might cost less or more than term insurance. Time horizon is the major determinant.
3.
Unlike whole life insurance, universal life _______.
Choose wisely. There is only one correct answer.
Doesnt build cash value
Doesnt provide death benefits
Doesnt have a fixed premium
Doesnt have to pay out at the end of the policy
Doesnt have a fixed premium. With universal life policies, you have the option of adjusting premiums and death benefits over the life of the policy.
4.
Variable life insurance policies have fixed premiums.
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True
False
True. Like whole life policies, variable life uses fixed premiums.
5.
With universal life insurance, your death benefit may change over the term of the policy.
Choose wisely. There is only one correct answer.
True
False
True. Universal life gives you the option of changing premiums or life insurance coverage levels.
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