Question 1

The period during which a surviving spouse is ineligible for Social Security benefits is referred to as the

Accepted Answer

A) emergency period. 
B) readjustment period. 
C) dependency period. 
D) blackout period. 
A) emergency period. 
B) readjustment period. 
C) dependency period. 
D) blackout period.

Question 2

Which of the following statements about yearly renewable term insurance is (are)true?
I.It requires evidence of insurability for renewal.
II.It is most appropriate when an insured needs lifetime protection.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 3

Which of the following statements about a decreasing term insurance policy is true?

Accepted Answer

A) The face amount of the policy decreases during the policy period,and the premium increases. 
B) The face amount of the policy decreases during the policy period,but the premium remains level. 
C) The premium decreases during the policy period,but the face amount remains constant. 
D) Both the premium and the face amount of the policy decrease gradually over the policy period. 
A) The face amount of the policy decreases during the policy period,and the premium increases. 
B) The face amount of the policy decreases during the policy period,but the premium remains level. 
C) The premium decreases during the policy period,but the face amount remains constant. 
D) Both the premium and the face amount of the policy decrease gradually over the policy period.

Question 4

Which of the following statements about the capital retention approach for determining life insurance needs is (are)true?
I.It assumes that life insurance proceeds will be liquidated to provide income to survivors.
II.It requires the preparation of a personal balance sheet.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 5

Carl would like to purchase life insurance.He would also like to invest in a mutual fund.An agent told Carl about a form of life insurance in which Carl could select where the saving component is invested.This form of life insurance has fixed premiums and the cash value is not guaranteed.This type of life insurance is called

Accepted Answer

A) universal life insurance. 
B) current assumption whole life. 
C) variable life insurance. 
D) indeterminate-premium whole life. 
A) universal life insurance. 
B) current assumption whole life. 
C) variable life insurance. 
D) indeterminate-premium whole life.

Question 6

All of the following statements about ordinary life insurance are true EXCEPT

Accepted Answer

A) Premiums are level throughout the policy period. 
B) The face amount of the policy is paid if the insured lives to age 65. 
C) There is a build-up of cash value that can be borrowed by the policyholder. 
D) It offers the policyholder the flexibility to meet a wide variety of financial objectives. 
A) Premiums are level throughout the policy period. 
B) The face amount of the policy is paid if the insured lives to age 65. 
C) There is a build-up of cash value that can be borrowed by the policyholder. 
D) It offers the policyholder the flexibility to meet a wide variety of financial objectives.

Question 7

Which of the following statements about an indeterminate-premium whole life insurance policy is (are)true?
I.It permits the insurer to adjust premiums based on anticipated future experience.
II.It allows policyholder dividends to be used to lower premiums.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 8

All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT

Accepted Answer

A) The effects of inflation are ignored. 
B) Other sources of income for survivors are ignored. 
C) Earnings are assumed to remain constant. 
D) Earnings during the individual's productive lifetime are ignored. 
A) The effects of inflation are ignored. 
B) Other sources of income for survivors are ignored. 
C) Earnings are assumed to remain constant. 
D) Earnings during the individual's productive lifetime are ignored.

Question 9

Ann is considering the purchase of a life insurance policy with these characteristics: flexible premium payments,the insurance and savings components are separate,the interest rate credited to the savings is tied to a market interest rate but a minimum rate is guaranteed,and a monthly administrative fee is charged.Ann is considering buying

Accepted Answer

A) whole life insurance. 
B) variable life insurance. 
C) universal life insurance. 
D) current assumption whole life. 
A) whole life insurance. 
B) variable life insurance. 
C) universal life insurance. 
D) current assumption whole life.

Question 10

Julian,age 45,would like to determine how much life insurance to purchase using the human life value approach.He assumes his average annual earnings over the next 20 years will be $40,000.Of this amount,$20,000 is available annually for the support of his family.Julian will generate this income for 20 more years and he believes that 5 percent is the appropriate interest (discount)rate.The present value of one dollar payable for 20 years at a discount rate of 5 percent is $12.46.What is Julian's human life value?

Accepted Answer

A) $184,600 
B) $249,200 
C) $360,800 
D) $400,000 
A) $184,600 
B) $249,200 
C) $360,800 
D) $400,000

Question 11

Which of the following statements about industrial life insurance (also called home service life insurance)policies is true?

Accepted Answer

A) Most policies have a face value exceeding $100,000. 
B) Most industrial life insurance policies are cash value coverage. 
C) Industrial life insurance is group term insurance coverage marketed to employers. 
D) This popular product accounts for over 40 percent of the life insurance sold today. 
A) Most policies have a face value exceeding $100,000. 
B) Most industrial life insurance policies are cash value coverage. 
C) Industrial life insurance is group term insurance coverage marketed to employers. 
D) This popular product accounts for over 40 percent of the life insurance sold today.

Question 12

Jessica is an agent for LMN Life Insurance Company.She met with Brad,who was interested in purchasing life insurance.Jessica explained the various uses of life insurance,including income for Brad's wife during the 1- or 2-year period following Brad's death.This period is known as the

Accepted Answer

A) dependency period. 
B) estate clearance period. 
C) blackout period. 
D) readjustment period. 
A) dependency period. 
B) estate clearance period. 
C) blackout period. 
D) readjustment period.

Question 13

Which of the following statements about a variable universal life insurance policy is (are)true?
I.There is a minimum guaranteed interest rate for the cash value.
II.The policyowner has a variety of investment options for the investment of premiums.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 14

A legal reserve in life insurance is a result of

Accepted Answer

A) premium taxes payable by life insurance companies being postponed during the early policy years. 
B) dividends being paid to policyowners. 
C) inadequate premiums in the early policy years being subsidized by investment earnings. 
D) excess premiums in the early policy years being invested at compound interest. 
A) premium taxes payable by life insurance companies being postponed during the early policy years. 
B) dividends being paid to policyowners. 
C) inadequate premiums in the early policy years being subsidized by investment earnings. 
D) excess premiums in the early policy years being invested at compound interest.

Question 15

Dave purchased a life insurance policy.The policy is nonparticipating and the cash values are based on the insurer's present mortality,investment,and expense experience.After 2 years,the insurer will recalculate the premium based on the mortality,investment,and expense experience at that time.Dave purchased

Accepted Answer

A) current assumption whole life. 
B) variable life insurance. 
C) universal life insurance. 
D) variable universal life insurance. 
A) current assumption whole life. 
B) variable life insurance. 
C) universal life insurance. 
D) variable universal life insurance.

The period during which a surviving spouse is ineligible for Social Security benefits is referred to as the

Which of the following statements about yearly renewable term insurance is (are)true? I.It requires evidence of insurability for renewal. II.It is most appropriate when an insured needs lifetime protection.

Which of the following statements about a decreasing term insurance policy is true?

Which of the following statements about the capital retention approach for determining life insurance needs is (are)true? I.It assumes that life insurance proceeds will be liquidated to provide income to survivors. II.It requires the preparation of a personal balance sheet.

All of the following statements about ordinary life insurance are true EXCEPT

Which of the following statements about an indeterminate-premium whole life insurance policy is (are)true? I.It permits the insurer to adjust premiums based on anticipated future experience. II.It allows policyholder dividends to be used to lower premiums.

All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT

Which of the following statements about industrial life insurance (also called home service life insurance)policies is true?

Jessica is an agent for LMN Life Insurance Company.She met with Brad,who was interested in purchasing life insurance.Jessica explained the various uses of life insurance,including income for Brad's wife during the 1- or 2-year period following Brad's death.This period is known as the

Which of the following statements about a variable universal life insurance policy is (are)true? I.There is a minimum guaranteed interest rate for the cash value. II.The policyowner has a variety of investment options for the investment of premiums.

A legal reserve in life insurance is a result of

Risk in Our Society

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section Ii

Auto Insurance

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

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Exam 11: Life Insurance

The period during which a surviving spouse is ineligible for Social Security benefits is referred to as the

Which of the following statements about yearly renewable term insurance is (are)true? I.It requires evidence of insurability for renewal. II.It is most appropriate when an insured needs lifetime protection.

Which of the following statements about a decreasing term insurance policy is true?

Which of the following statements about the capital retention approach for determining life insurance needs is (are)true? I.It assumes that life insurance proceeds will be liquidated to provide income to survivors. II.It requires the preparation of a personal balance sheet.

All of the following statements about ordinary life insurance are true EXCEPT

Which of the following statements about an indeterminate-premium whole life insurance policy is (are)true? I.It permits the insurer to adjust premiums based on anticipated future experience. II.It allows policyholder dividends to be used to lower premiums.

All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT

Which of the following statements about industrial life insurance (also called home service life insurance)policies is true?

Jessica is an agent for LMN Life Insurance Company.She met with Brad,who was interested in purchasing life insurance.Jessica explained the various uses of life insurance,including income for Brad's wife during the 1- or 2-year period following Brad's death.This period is known as the

Which of the following statements about a variable universal life insurance policy is (are)true? I.There is a minimum guaranteed interest rate for the cash value. II.The policyowner has a variety of investment options for the investment of premiums.

A legal reserve in life insurance is a result of

Risk in Our Society

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section Ii

Auto Insurance

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters