QUESTION 31

1. The convertibility and renewability feature needs to be specifically included in the term policy to be effective.

True

False

QUESTION 32

1. Over the time, the cash value in the policy accumulates and the amount of pure insurance protection decreases.

True

False

QUESTION 33

1. Legal reserve requires a more stringent interest rate assumption and mortality table.

True

False

QUESTION 34

1. The purpose of legal reserve is to provide information to the insurance commissioner to evaluate the solvency of the underlying insurance company.

True

False

QUESTION 35

1. The beneficiary may select any of the same settlement options available to the policyowner when the proceeds become payable.

True

False

QUESTION 36

1. The return of premium rider essentially pays an additional amount at death that equals the premiums paid up instead of return premium.

True

False

QUESTION 37

1. Suppose a policyowner has borrowed $8000 from her cash value and was only able to pay back $2000. She is unable to continue paying premiums and chooses the extended term option. The cash value of the original policy was $20,000. Its face value was $50,000. In this case, the face amount of the extended term insurance is $44,000.

True

False

QUESTION 38

1. With other factors being equal, the premium of $1000 of initial face amount of term insurance is less for the decreasing term rider than for the level term rider.

True

False

QUESTION 39

1. Because cash value belongs to the insured, when partial withdrawals are made, no interest will be charged.

True

False

QUESTION 40

1. Joint life and survivorship annuity is also called last survivor annuity.

True

False