Question 1

When it is unclear who the beneficiary of a life insurance policy is,the insurer uses the process of interpleader so the court can settle any dispute.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following life insurance policies would have the lowest premium for a male age 40?

Accepted Answer

A) level term 
B) whole life continuous premium 
C) whole life paid up at 45 
D) variable life 
A) level term 
B) whole life continuous premium 
C) whole life paid up at 45 
D) variable life

Question 3

Which of the following is false with respect to universal life insurance (ULI)?

Accepted Answer

A) is interest sensitive 
B) has flexible premiums and benefits 
C)  is cheaper than ordinary whole life 
D) has the tax benefits of ordinary life insurance 
A) is interest sensitive 
B) has flexible premiums and benefits 
C)  is cheaper than ordinary whole life 
D) has the tax benefits of ordinary life insurance

Question 4

A convertible term policy allows the insured to convert a term policy into any other type of policy including a different type of term policy.

Accepted Answer

A) True 
 B)False

Question 5

A term insurance policy that includes a conversion privilege gives the insured the right to:

Accepted Answer

A) renew the policy for another time period of the same length 
B) exchange the term policy for a permanent plan of insurance 
C) increase or decrease the death benefit 
D) include the nonforfeiture provision in the policy 
A) renew the policy for another time period of the same length 
B) exchange the term policy for a permanent plan of insurance 
C) increase or decrease the death benefit 
D) include the nonforfeiture provision in the policy

Question 6

Premiums for industrial insurance are collected at the insured's home,often on a weekly basis.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true?

Accepted Answer

A) Term life insurance is most suitable when the need for protection is permanent 
B) Decreasing term insurance is useful when the insured's debt is increasing at a steady, predictable rate 
C) Whole life insurance is best when the insured desires temporary coverage, because its cash values will refund nearly all premiums paid 
D) Whole life insurance can provide funds whether the insured dies or survives the policy period 
A) Term life insurance is most suitable when the need for protection is permanent 
B) Decreasing term insurance is useful when the insured's debt is increasing at a steady, predictable rate 
C) Whole life insurance is best when the insured desires temporary coverage, because its cash values will refund nearly all premiums paid 
D) Whole life insurance can provide funds whether the insured dies or survives the policy period

Question 8

MaryJo owns a whole-life insurance policy on her own life. She has accumulated $49,000 of cash value in the policy. Which of the following statements is/are true regarding this policy and the options MaryJo has?
I.She can withdraw the entire $40,000 at any time and forfeit her death protection
II.She can borrow the $40,000,but will lose all her death protection until the loan is paid back
III.If MaryJo dies tomorrow with no policy loan outstanding,her beneficiary will receive the face value of the insurance policy,while the $40,000 in cash value becomes a survivorship benefit for other insureds

Accepted Answer

A) I, II, and III 
B) I and II 
C) II and III 
D) I and III 
A) I, II, and III 
B) I and II 
C) II and III 
D) I and III

Question 9

Universal life was created in response to which of the following?

Accepted Answer

A) declining popularity of term life insurance in the mid-1980's 
B) declining inflation and investment yields in the late 1970's 
C) less-sophisticated consumers demanding easier-to-read policies 
D) high-yield, low risk investment opportunities that made whole life insurance unattractive 
A) declining popularity of term life insurance in the mid-1980's 
B) declining inflation and investment yields in the late 1970's 
C) less-sophisticated consumers demanding easier-to-read policies 
D) high-yield, low risk investment opportunities that made whole life insurance unattractive

Question 10

In group life insurance an insurer might accept an exposure who could not meet the insurer's standards for individual life insurance.

Accepted Answer

A) True 
 B)False

Question 11

The accumulation of a reserve consisting of excess payments above the mortality cost in the early years of a policy is necessary for the:

Accepted Answer

A) deferred annuity plan 
B) minimum reserve standard 
C) level premium plan 
D) yearly renewable term plan 
A) deferred annuity plan 
B) minimum reserve standard 
C) level premium plan 
D) yearly renewable term plan

Question 12

Which of the following is a permanent need for purchasing life insurance?

Accepted Answer

A) Funding a child's college education 
B) Paying off a mortgage loan 
C) Providing for funeral expenses 
D) Funding the readjustment period for a spouse 
A) Funding a child's college education 
B) Paying off a mortgage loan 
C) Providing for funeral expenses 
D) Funding the readjustment period for a spouse

Question 13

In group insurance,the conversion privilege allows an insured to convert from a whole life to a term policy.

Accepted Answer

A) True 
 B)False

Question 14

Term insurance is normally purchased by people between the ages of…?

Accepted Answer

A) 25 and 65 
B) 45 and 65 
C) 20 and 60 
D) 25 and 75 
A) 25 and 65 
B) 45 and 65 
C) 20 and 60 
D) 25 and 75

Question 15

Jens is a newly-married man who wants $100,000 of life insurance,but he cannot afford the ordinary level whole life premium until he gets out of graduate school. He would like to pay less for the first few years of coverage until he graduates. He can still obtain the desired amount of insurance for the whole of his life by purchasing:

Accepted Answer

A) limited payment whole life 
B) single premium whole life 
C) deferred premium annuity life 
D) convertible term 
A) limited payment whole life 
B) single premium whole life 
C) deferred premium annuity life 
D) convertible term

Question 16

The primary reason life insurance policies have a savings element is to allow the:

Accepted Answer

A) insured to have money for old age or for other purposes 
B) insurer to reduce the cost of insurance by investing money at high interest rates 
C) insured to accumulate funds to aid in the long term financing of private business enterprises 
D) insured to obtain lifetime protection at a level premium 
A) insured to have money for old age or for other purposes 
B) insurer to reduce the cost of insurance by investing money at high interest rates 
C) insured to accumulate funds to aid in the long term financing of private business enterprises 
D) insured to obtain lifetime protection at a level premium

Question 17

Which of the following is not correct with respect to universal life insurance?

Accepted Answer

A) is interest sensitive 
B) has flexible premiums and benefits 
C) usually involves more guarantees than ordinary whole life 
D) the pattern of face amount may be selected 
A) is interest sensitive 
B) has flexible premiums and benefits 
C) usually involves more guarantees than ordinary whole life 
D) the pattern of face amount may be selected

Question 18

Which of the following best describes what life insurance is designed to protect against?

Accepted Answer

A)  dying before financial obligations have been met 
B) outliving your income 
C) probability of dying increasing as you grow older 
D) loss of income due to retirement 
A)  dying before financial obligations have been met 
B) outliving your income 
C) probability of dying increasing as you grow older 
D) loss of income due to retirement

Question 19

Explain why there is a savings element to a whole life insurance contract.

Accepted Answer

The answer of Explain why there is a savings element...

Question 20

Which of these is the least appropriate use for whole life insurance?

Accepted Answer

A) mortgage retirement fund 
B) dependent spouse income fund 
C) retirement need 
D) emergency fund 
A) mortgage retirement fund 
B) dependent spouse income fund 
C) retirement need 
D) emergency fund

Exam 13: Life Insurance Policies

When it is unclear who the beneficiary of a life insurance policy is,the insurer uses the process of interpleader so the court can settle any dispute.

Which of the following life insurance policies would have the lowest premium for a male age 40?

Which of the following is false with respect to universal life insurance (ULI)?

A convertible term policy allows the insured to convert a term policy into any other type of policy including a different type of term policy.

A term insurance policy that includes a conversion privilege gives the insured the right to:

Premiums for industrial insurance are collected at the insured's home,often on a weekly basis.

Which of the following is true?

Universal life was created in response to which of the following?

In group life insurance an insurer might accept an exposure who could not meet the insurer's standards for individual life insurance.

The accumulation of a reserve consisting of excess payments above the mortality cost in the early years of a policy is necessary for the:

Which of the following is a permanent need for purchasing life insurance?

In group insurance,the conversion privilege allows an insured to convert from a whole life to a term policy.

Term insurance is normally purchased by people between the ages of…?

The primary reason life insurance policies have a savings element is to allow the:

Which of the following is not correct with respect to universal life insurance?

Which of the following best describes what life insurance is designed to protect against?

Explain why there is a savings element to a whole life insurance contract.

Which of these is the least appropriate use for whole life insurance?

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