Exam 11: Life Insurance

Which of the following statements about policies sold to preferred risks is (are)true? I.Preferred risks are people whose mortality experience (deaths per thousand at a given age)is expected to be more favorable than average. II.Insurers require preferred risks to purchase at least a minimum amount of life insurance,such as $250,000.

Which of the following statements about second-to-die life insurance is (are)true? I.The insurance is a form of endowment coverage. II.The premium is lower than the combined cost of purchasing a life insurance policy on each insured.

Which of the following statements about premature death is (are)true? I.From an economic standpoint,premature means death before a specified age,such as 65. II.The economic problem of problem of premature death in the U.S.has declined substantially over time.

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

Which of the following statements about term insurance is true?

Tamara purchased a term insurance policy when she had high life insurance needs and limited income.Now Tamara can afford whole life insurance.What term life insurance provision will permit Tamara to switch her term insurance to whole life insurance without having to show that she is still insurable?

The difference between the legal reserve of a whole life policy and the face amount of insurance is the

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

Which of the following statements about limited-payment life insurance is true?

Which of the following is a cost/expense that an estate clearance fund is designed to pay?

Which of the following statements about variable life insurance is true?

The net amount at risk for an ordinary life insurance policy is the difference between the

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 cash value is tied to a changing market interest rate but a minimum interest rate is guaranteed,and a monthly administrative fee is charged.Ann is considering buying

Which of the following $100,000 whole life insurance policies,issued by the same company to a man age 32,would require the highest first-year premium?

A legal reserve in life insurance is a result of

Alex,age 26,purchased a 20-payment whole life insurance policy.After Alex has made 20 premium payments,his life insurance policy is considered

All of the following statements describe the flexibility available to the owner of a universal life insurance policy EXCEPT

A whole life insurance policy in which premiums are reduced for an initial period (e.g.3 years)and are higher thereafter is an example of a

What happens to the premiums for yearly renewable term insurance as an insured gets older?

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?