LOMA 281 Module 2 Exam with Complete Solutions Graded A+
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Course
LOMA 281
Institution
LOMA 281
LOMA 281 Module 2 Exam with Complete Solutions Graded A+
The type of annuity contract under which the insurer guarantees at least a minimum interest rate and a payment amount that won't change is known as a
a. Variable annuity
b. Fixed annuity - Answer-B.
Premiums paid for a variable annu...
LOMA 281 Module 2 Exam
with Complete Solutions
Graded A+
The type of annuity contract under which the insurer guarantees at least a minimum
interest rate and a payment amount that won't change is known as a
a. Variable annuity
b. Fixed annuity - Answer-B.
Premiums paid for a variable annuity typically are placed in the insurer's
a. General account
b. Separate account - Answer-B.
In this exercise, you will match each variable annuity contract feature with its name.
Guarantees a minimum protected accumulation value—usually the principal or the
principal plus a modest growth factor—if the contract remains in force for a specified
period of time.
a. Guaranteed minimum accumulation benefit (GMAB)
b. Guaranteed lifetime withdrawal benefit (GLWB)
c. Guaranteed minimum withdrawal benefit (GMWB)
d. Guaranteed minimum income benefit (GMIB)
e. Guaranteed minimum death benefit (GMDB) - Answer-A.
Guarantees a minimum protected value and a guaranteed minimum income payment
amount.
a. Guaranteed minimum accumulation benefit (GMAB)
b. Guaranteed lifetime withdrawal benefit (GLWB)
c. Guaranteed minimum withdrawal benefit (GMWB)
d. Guaranteed minimum income benefit (GMIB)
e. Guaranteed minimum death benefit (GMDB) - Answer-D.
If the contract owner dies before annuity payments begin, the beneficiary will receive
the greater of the contract's accumulation value or a protected amount.
,a. Guaranteed minimum accumulation benefit (GMAB)
b. Guaranteed lifetime withdrawal benefit (GLWB)
c. Guaranteed minimum withdrawal benefit (GMWB)
d. Guaranteed minimum income benefit (GMIB)
e. Guaranteed minimum death benefit (GMDB) - Answer-E.
Guarantees up to a certain percentage of a designated amount can be withdrawn
annually for life, even if subaccount investments perform poorly.
a. Guaranteed minimum accumulation benefit (GMAB)
b. Guaranteed lifetime withdrawal benefit (GLWB)
c. Guaranteed minimum withdrawal benefit (GMWB)
d. Guaranteed minimum income benefit (GMIB)
e. Guaranteed minimum death benefit (GMDB) - Answer-B.
Guarantees up to a certain percentage of a designated amount can be withdrawn until
the designated amount reaches zero, even if subaccount investments perform poorly.
a. Guaranteed minimum accumulation benefit (GMAB)
b. Guaranteed lifetime withdrawal benefit (GLWB)
c. Guaranteed minimum withdrawal benefit (GMWB)
d. Guaranteed minimum income benefit (GMIB)
e. Guaranteed minimum death benefit (GMDB) - Answer-C.
Withdrawal Provisions - Answer-A deferred annuity contract provision that gives the
contract owner the right to withdraw all or part of the contract's accumulation value
during the accumulation period.
Do insurers place any limits on withdrawals?
a. Yes
b. No - Answer-A.
withdrawal charge - Answer-A charge imposed on the owner of a deferred annuity when
the owner withdraws more than a stated percentage of the annuity contract's
accumulation value in one year.
Does a withdrawal terminate the contract?
a. Yes
b. No
c. Sometimes - Answer-B.
Which type of whole life insurance policy will best be able to give Arabella lifetime
protection without straining her retirement income?
Single-premium whole life policy
,Limited-payment whole life policy
Continuous-premium whole life policy - Answer-B
Financial needs life insurance can meet - Answer-- paying household expenses
- covering outstanding debts
- Paying outstanding medical, hospital, and funeral expenses,
- providing financial support for the family
- funding a child's education
Term Life Insurance - Answer-Life insurance that provides a death benefit only if the
insured dies during the period specified in the policy.
level term life insurance - Answer-Term life insurance that provides a policy benefit that
remains the same over the term of the policy.
Decreasing Term Life Insurance - Answer-Term life insurance that provides a policy
benefit that decreases in amount over the term of coverage
Mortgage Insurance - Answer-A plan of decreasing term insurance designed to provide
a benefit amount that corresponds to the decreasing amount owed on a mortgage loan.
When Michael bought a house, he obtained a mortgage loan from the Archway Bank.
He also bought a mortgage insurance policy from Able Life.
Is Archway Bank a party to Michael's mortgage insurance contract with Able Life?
a. yes
b. no - Answer-B.
Who can Michael name as the beneficiary of his mortgage insurance policy?
a. His Wife Only
b. Archway Bank Only
c. His Wife, Archway Bank, or Someone Else - Answer-C.
If Michael names his wife as the policy beneficiary, does she have to use the policy
proceeds to repay the mortgage loan?
a. yes
b. no - Answer-B.
Credit Life Insurance - Answer-A type of term life insurance designed to pay the balance
due on a loan if the borrower dies before the loan is repaid.
, Family Income Coverage - Answer-A plan of decreasing term life insurance that
provides a stated monthly income benefit amount if the insured dies during the term of
coverage.
Increasing Term Life Insurance - Answer-Term life insurance that provides a death
benefit that starts at one amount and increases by some specified amount or
percentage at stated intervals over the policy term.
Decide whether the statements below describe increasing term insurance, level term
insurance, or decreasing term insurance.
A 5-year term life insurance policy that offers a death benefit of $50,000 for the first year
of the policy term, $40,000 for the second year, and so on. The benefit for the fifth year
is $10,000.
a. Increasing Term Insurance
b. Level Term Insurance
c. Decreasing Term Insurance - Answer-C.
A 5-year term life insurance policy that provides a $100,000 death benefit if the insured
dies at any time during the 5-year policy term.
a. increasing term insurance
b. level term insurance
c. decreasing term insurance - Answer-B.
A 5-year term life insurance policy that pays a $100,000 benefit during the policy's first
year, a $105,000 benefit during the second year, and so on. The benefit during the fifth
year is $120,000.
Increasing term insurance
Level term insurance
Decreasing term insurance
a. increasing term insurance
b. level term insurance
c. decreasing term insurance - Answer-A.
Return of Premium (ROP) - Answer-A form of term life insurance that provides a death
benefit if the insured dies during the term of coverage and promises a return of
premiums if the insured does not die during the term of coverage.
Renewable Term Insurance - Answer-Term life insurance that gives the policyowner the
option to continue the policy's coverage at the end of the specified term without
presenting evidence of insurability.
Evidence of insurability - Answer-Proof that a given person is an insurable risk.
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