Question 1

Individuals and families purchase life insurance primarily to:

Accepted Answer

A) pay liability claims resulting from accidents. 
B) protect someone who depends on them from financial losses caused by their death. 
C) fund lavish retirement vacations. 
D) keep up with people with a similar financial situation. 
E) make early retirement possible. 
A) pay liability claims resulting from accidents. 
B) protect someone who depends on them from financial losses caused by their death. 
C) fund lavish retirement vacations. 
D) keep up with people with a similar financial situation. 
E) make early retirement possible.

Question 2

Universal life is a whole life policy that combines term insurance with an investment option.

Accepted Answer

A) True 
 B)False

Question 3

Stock life insurance companies are owned by their policyholders.

Accepted Answer

A) True 
 B)False

Question 4

You can purchase life insurance from two types of life insurance companies.

Accepted Answer

A) True 
 B)False

Question 5

You probably have little or no need for life insurance if you are:

Accepted Answer

A) a single person living with your parents. 
B) divorced and have two children. 
C) married and your spouse works. 
D) gainfully employed. 
E) a two-earner household with a mortgage. 
A) a single person living with your parents. 
B) divorced and have two children. 
C) married and your spouse works. 
D) gainfully employed. 
E) a two-earner household with a mortgage.

Question 6

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Accepted Answer

A) True 
 B)False

Question 7

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

Accepted Answer

A) Stock 
B) Debt 
C) Mutual 
D) Exclusionary 
E) Cooperative 
A) Stock 
B) Debt 
C) Mutual 
D) Exclusionary 
E) Cooperative

Question 8

A beneficiary is a person designated to receive something,such as life insurance proceeds,from the insured.

Accepted Answer

A) True 
 B)False

Question 9

One of the ten golden rules when buying life insurance is to:

Accepted Answer

A) buy from an unlicensed company. 
B) buy more life insurance than you need. 
C) select an agent who is incompetent. 
D) ask about lower premium rates for nonsmokers. 
E) not worry about reading and understanding your policy. 
A) buy from an unlicensed company. 
B) buy more life insurance than you need. 
C) select an agent who is incompetent. 
D) ask about lower premium rates for nonsmokers. 
E) not worry about reading and understanding your policy.

Question 10

The prices of life insurance policies:

Accepted Answer

A) vary considerably among life insurance companies. 
B) are relatively the same for all policies. 
C) are higher for females than males. 
D) have remained constant over time. 
E) are set by the government here in the United States. 
A) vary considerably among life insurance companies. 
B) are relatively the same for all policies. 
C) are higher for females than males. 
D) have remained constant over time. 
E) are set by the government here in the United States.

Question 11

The premium that is refunded to policyholders of a participating policy is called the policy dividend.

Accepted Answer

A) True 
 B)False

Question 12

Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage.He can also access his cash value with a policy loan or a withdrawal.What type of insurance does Russell likely have?

Accepted Answer

A) Ordinary whole life 
B) Limited payment life 
C) Variable life 
D) Adjustable life 
E) Universal life 
A) Ordinary whole life 
B) Limited payment life 
C) Variable life 
D) Adjustable life 
E) Universal life

Question 13

The cash values of a variable life insurance policy increase at a constant rate over time.

Accepted Answer

A) True 
 B)False

Question 14

Which type of life insurance policy requires you to pay premiums for a stipulated period,usually 20 or 30 years,or until you reach a specified age?

Accepted Answer

A) Modified life policy 
B) Variable life policy 
C) Adjustable life policy 
D) Limited payment policy 
E) Endowment policy 
A) Modified life policy 
B) Variable life policy 
C) Adjustable life policy 
D) Limited payment policy 
E) Endowment policy

Question 15

Most insurance companies can determine how long a particular person will live.

Accepted Answer

A) True 
 B)False

Question 16

Using the "nonworking" spouse method,what should be the life insurance needs for a family whose youngest child is 8 years old?

Accepted Answer

A) $50,000 
B) $70,000 
C) $80,000 
D) $100,000 
E) $180,000 
A) $50,000 
B) $70,000 
C) $80,000 
D) $100,000 
E) $180,000

Question 17

Accelerated benefits are life insurance policy proceeds paid to the terminally ill policyholder before he or she dies.

Accepted Answer

A) True 
 B)False

Question 18

Term life insurance premiums decrease as you get older.

Accepted Answer

A) True 
 B)False

Question 19

The DINK method of determining life insurance needs assumes that your spouse will continue to work after your death.

Accepted Answer

A) True 
 B)False

Question 20

The coverage of term insurance ends at the conclusion of the term,but you can continue it if you have a renewability option.

Accepted Answer

A) True 
 B)False

Individuals and families purchase life insurance primarily to:

Universal life is a whole life policy that combines term insurance with an investment option.

Stock life insurance companies are owned by their policyholders.

You can purchase life insurance from two types of life insurance companies.

You probably have little or no need for life insurance if you are:

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

A beneficiary is a person designated to receive something,such as life insurance proceeds,from the insured.

One of the ten golden rules when buying life insurance is to:

The prices of life insurance policies:

The premium that is refunded to policyholders of a participating policy is called the policy dividend.

Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage.He can also access his cash value with a policy loan or a withdrawal.What type of insurance does Russell likely have?

The cash values of a variable life insurance policy increase at a constant rate over time.

Which type of life insurance policy requires you to pay premiums for a stipulated period,usually 20 or 30 years,or until you reach a specified age?

Most insurance companies can determine how long a particular person will live.

Using the "nonworking" spouse method,what should be the life insurance needs for a family whose youngest child is 8 years old?

Accelerated benefits are life insurance policy proceeds paid to the terminally ill policyholder before he or she dies.

Term life insurance premiums decrease as you get older.

The DINK method of determining life insurance needs assumes that your spouse will continue to work after your death.

The coverage of term insurance ends at the conclusion of the term,but you can continue it if you have a renewability option.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 12: Life Insurance

Individuals and families purchase life insurance primarily to:

Universal life is a whole life policy that combines term insurance with an investment option.

Stock life insurance companies are owned by their policyholders.

You can purchase life insurance from two types of life insurance companies.

You probably have little or no need for life insurance if you are:

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

A beneficiary is a person designated to receive something,such as life insurance proceeds,from the insured.

One of the ten golden rules when buying life insurance is to:

The prices of life insurance policies:

The premium that is refunded to policyholders of a participating policy is called the policy dividend.

Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage.He can also access his cash value with a policy loan or a withdrawal.What type of insurance does Russell likely have?

The cash values of a variable life insurance policy increase at a constant rate over time.

Which type of life insurance policy requires you to pay premiums for a stipulated period,usually 20 or 30 years,or until you reach a specified age?

Most insurance companies can determine how long a particular person will live.

Using the "nonworking" spouse method,what should be the life insurance needs for a family whose youngest child is 8 years old?

Accelerated benefits are life insurance policy proceeds paid to the terminally ill policyholder before he or she dies.

Term life insurance premiums decrease as you get older.

The DINK method of determining life insurance needs assumes that your spouse will continue to work after your death.

The coverage of term insurance ends at the conclusion of the term,but you can continue it if you have a renewability option.

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: the Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health,disability,and Long-Term Care Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters