Question 1

Which type of life insurance policy combines term insurance with an investment option?

Accepted Answer

A) Whole life 
B) Ordinary life 
C) Universal life 
D) Adjustable life 
E) Extended life 
A) Whole life 
B) Ordinary life 
C) Universal life 
D) Adjustable life 
E) Extended life

Question 2

A second-to-die life insurance policy pays a death benefit when the first spouse dies.

Accepted Answer

A) True 
 B)False

Question 3

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John 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 4

How frequently does the premium for a whole life policy change during the insured's life?

Accepted Answer

A) Every year 
B) Every two years 
C) Every five years 
D) Every 10 years 
E) It never changes 
A) Every year 
B) Every two years 
C) Every five years 
D) Every 10 years 
E) It never changes

Question 5

A beneficiary can be a spouse or child who:

Accepted Answer

A) acts as a trustee of your insurance policy. 
B) is a guardian of your children. 
C) acts on your behalf. 
D) is designated to receive your life insurance proceeds. 
E) acts as an agent handling your insurance policy. 
A) acts as a trustee of your insurance policy. 
B) is a guardian of your children. 
C) acts on your behalf. 
D) is designated to receive your life insurance proceeds. 
E) acts as an agent handling your insurance policy.

Question 6

Which is a correct statement about life insurance?

Accepted Answer

A) Life insurance provides liquidity at the time of death. 
B) Life insurance is still more often bought than sold. 
C) Life insurance is one of the least expensive purchases you may ever make. 
D) Choosing the right policy takes only a few minutes. 
E) Consumer awareness of life insurance has changed significantly over the years. 
A) Life insurance provides liquidity at the time of death. 
B) Life insurance is still more often bought than sold. 
C) Life insurance is one of the least expensive purchases you may ever make. 
D) Choosing the right policy takes only a few minutes. 
E) Consumer awareness of life insurance has changed significantly over the years.

Question 7

The 2001 Mortality Table separates the mortality experience by:

Accepted Answer

A) age. 
B) income level. 
C) occupation. 
D) domicile. 
E) gender. 
A) age. 
B) income level. 
C) occupation. 
D) domicile. 
E) gender.

Question 8

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Accepted Answer

A) True 
 B)False

Question 9

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following is a price quote service that offers convenient and free,no-obligation life insurance premium comparisons?

Accepted Answer

A) Term Quote 
B) Bargain Quote 
C) Life Quote 
D) Expensive Quote 
E) Best Value Quote 
A) Term Quote 
B) Bargain Quote 
C) Life Quote 
D) Expensive Quote 
E) Best Value Quote

Question 11

Francesca Brown has a life insurance policy that provides her with protection for the next five years.However,she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time.Her premiums will rise during each five-year period.What type of term life insurance does Francesca likely have?

Accepted Answer

A) Straight 
B) Renewable 
C) Convertible 
D) Decreasing 
E) Accelerated 
A) Straight 
B) Renewable 
C) Convertible 
D) Decreasing 
E) Accelerated

Question 12

The Multiple of Income method of determining life insurance needs:

Accepted Answer

A) assumes you have only two children. 
B) assumes your spouse does not work. 
C) assumes your insurance needs are complex. 
D) uses your annual income as the sole factor. 
E) assumes your spouse is in an occupation with an uncertain future. 
A) assumes you have only two children. 
B) assumes your spouse does not work. 
C) assumes your insurance needs are complex. 
D) uses your annual income as the sole factor. 
E) assumes your spouse is in an occupation with an uncertain future.

Question 13

Under the life income option,payments are made to the beneficiary for as long as he or she lives.

Accepted Answer

A) True 
 B)False

Question 14

Most life insurance companies are mutuals.

Accepted Answer

A) True 
 B)False

Question 15

Suppose your annual premium for a $30,000,20-year limited-payment policy is $600 over the 20-year period.The cash value of your policy at the end of the 20 years is $10,000.Assume that you could have invested the annual premium in a mutual fund yielding 7 percent annually.What is the net cost of your insurance for the 20-year period? Use a factor of 40.995 for your time value of money calculation.

Accepted Answer

Total of premiums paid over 20 years = $

Question 16

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about 70 percent of your salary for seven years.

Accepted Answer

A) True 
 B)False

Question 17

Most people buy life insurance to protect someone who depends on them from financial losses caused by their death.

Accepted Answer

A) True 
 B)False

Question 18

Which statement is correct regarding stock life insurance companies?

Accepted Answer

A) A stock company sells participating policies. 
B) A stock company always charges higher premiums than mutual companies. 
C) A stockholder receives a policy dividend. 
D) A stock company generally sells nonparticipating policies. 
E) A stock company is owned by policyholders. 
A) A stock company sells participating policies. 
B) A stock company always charges higher premiums than mutual companies. 
C) A stockholder receives a policy dividend. 
D) A stock company generally sells nonparticipating policies. 
E) A stock company is owned by policyholders.

Question 19

Which statement is correct regarding mutual life insurance companies?

Accepted Answer

A) Mutual insurance companies have stockholders. 
B) Nearly all mutual companies issue only nonparticipating policies. 
C) Premiums are lower than those offered by stock companies. 
D) Mutual companies do not pay policy dividends. 
E) A mutual company refunds part of the premium to its policyholders. 
A) Mutual insurance companies have stockholders. 
B) Nearly all mutual companies issue only nonparticipating policies. 
C) Premiums are lower than those offered by stock companies. 
D) Mutual companies do not pay policy dividends. 
E) A mutual company refunds part of the premium to its policyholders.

Question 20

Life insurance is available from a wide range of private and public sources.

Accepted Answer

A) True 
 B)False

Which type of life insurance policy combines term insurance with an investment option?

A second-to-die life insurance policy pays a death benefit when the first spouse dies.

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John likely have?

How frequently does the premium for a whole life policy change during the insured's life?

A beneficiary can be a spouse or child who:

Which is a correct statement about life insurance?

The 2001 Mortality Table separates the mortality experience by:

A term insurance policy pays a benefit only if you die during the period that the policy covers.

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Which one of the following is a price quote service that offers convenient and free,no-obligation life insurance premium comparisons?

The Multiple of Income method of determining life insurance needs:

Under the life income option,payments are made to the beneficiary for as long as he or she lives.

Most life insurance companies are mutuals.

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about 70 percent of your salary for seven years.

Most people buy life insurance to protect someone who depends on them from financial losses caused by their death.

Which statement is correct regarding stock life insurance companies?

Which statement is correct regarding mutual life insurance companies?

Life insurance is available from a wide range of private and public sources.

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

Which type of life insurance policy combines term insurance with an investment option?

A second-to-die life insurance policy pays a death benefit when the first spouse dies.

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John likely have?

How frequently does the premium for a whole life policy change during the insured's life?

A beneficiary can be a spouse or child who:

Which is a correct statement about life insurance?

The 2001 Mortality Table separates the mortality experience by:

A term insurance policy pays a benefit only if you die during the period that the policy covers.

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Which one of the following is a price quote service that offers convenient and free,no-obligation life insurance premium comparisons?

The Multiple of Income method of determining life insurance needs:

Under the life income option,payments are made to the beneficiary for as long as he or she lives.

Most life insurance companies are mutuals.

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about 70 percent of your salary for seven years.

Most people buy life insurance to protect someone who depends on them from financial losses caused by their death.

Which statement is correct regarding stock life insurance companies?

Which statement is correct regarding mutual life insurance companies?

Life insurance is available from a wide range of private and public sources.

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