Questões de Types of Policies (Life)

1. TDI-PEARSONVUE — 2026

An indexed universal life policy credits interest based on the performance of the S&P 500. The policy has a participation rate of 80% and a cap of 10%. If the index increases 15% this year, what interest rate is credited to the policy?

1. A)15%
2. B)12%
3. C)10%
4. D)8%

Gabarito: C

The participation rate would give 12% (80% of 15%), but the cap limits the maximum credit to 10%. The cap takes precedence when the calculated rate exceeds it.

2. TDI-PEARSONVUE — 2026

A 30-year-old purchases annual renewable term insurance. What happens to the premium each year the policy is renewed?

1. A)Premium remains level throughout the renewable period
2. B)Premium increases based on the insured's attained age
3. C)Premium decreases as the insured gets older
4. D)Premium is recalculated based on current health status

Gabarito: B

Annual renewable term (ART) premiums increase each year because they reflect the insured's attained age and corresponding mortality risk. No medical evidence is required for renewal during the renewable period.

3. TDI-PEARSONVUE — 2026

A 35-year-old purchases a 20-year level term policy. What happens at the end of the term period if no action is taken?

1. A)The policy converts to whole life automatically
2. B)The policy terminates with no value
3. C)The policy continues with reduced coverage
4. D)The premiums are refunded to the insured

Gabarito: B

Level term policies expire at the end of the specified term period with no cash value or further coverage unless renewed or converted according to policy provisions.

4. TDI-PEARSONVUE — 2026

A family income policy combines whole life insurance with:

1. A)Universal life insurance
2. B)Decreasing term insurance
3. C)Variable life insurance
4. D)Endowment insurance

Gabarito: B

A family income policy combines whole life with decreasing term insurance. If the insured dies during the term period, the policy pays monthly income for the remainder of the period, plus the whole life face amount at the end.

5. TDI-PEARSONVUE — 2026

A whole life policy owner takes out a policy loan. What is the typical effect on the death benefit if the insured dies before repaying the loan?

1. A)The death benefit is paid in full and the loan is forgiven
2. B)The outstanding loan balance plus interest is deducted from the death benefit
3. C)The beneficiary must repay the loan before receiving any death benefit
4. D)The policy is void due to the outstanding debt

Gabarito: B

Policy loans plus any accrued interest are deducted from the death benefit payable to the beneficiary. The loan does not need to be repaid separately.

6. TDI-PEARSONVUE — 2026

A variable life insurance policy's cash value fluctuates based on:

1. A)The insurer's general account performance
2. B)Changes in the Consumer Price Index
3. C)Performance of selected separate account investments
4. D)Declared interest rates by the insurance company

Gabarito: C

Variable life insurance cash values vary based on the performance of investments in separate accounts chosen by the policyowner, subject to market risk.