Question 1

Life insurance proceeds may be used to:

Accepted Answer

A) pay off a home mortgage. 
B) cover funeral costs. 
C) make charitable bequests. 
D) pay estate taxes. 
E) All of these 
A) pay off a home mortgage. 
B) cover funeral costs. 
C) make charitable bequests. 
D) pay estate taxes. 
E) All of these

Question 2

The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-earner's death is known as which of the following estimation methods?

Accepted Answer

A) Nonworking spouse 
B) Easy method 
C) DINK method 
D) Family need 
E) Soccer mom 
A) Nonworking spouse 
B) Easy method 
C) DINK method 
D) Family need 
E) Soccer mom

Question 3

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the major rating agencies.

Accepted Answer

A) True 
 B)False

Question 4

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Accepted Answer

A) True 
 B)False

Question 5

Two-earner couples may have a moderate need for life insurance,especially if they have a mortgage or other large debts.

Accepted Answer

A) True 
 B)False

Question 6

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Accepted Answer

A) $310,000 
B) $441,000 
C) $630,000 
D) $1,000,000 
E) $1,200,000 
A) $310,000 
B) $441,000 
C) $630,000 
D) $1,000,000 
E) $1,200,000

Question 7

Cash-value policies may make sense for people who:

Accepted Answer

A) intend to keep the policies for only a couple of years. 
B) are able to save easily. 
C) must be forced to save. 
D) need to accumulate reserves in a few years. 
E) need benefits in the early years. 
A) intend to keep the policies for only a couple of years. 
B) are able to save easily. 
C) must be forced to save. 
D) need to accumulate reserves in a few years. 
E) need benefits in the early years.

Question 8

The most common type of permanent life insurance is called:

Accepted Answer

A) whole life. 
B) term life. 
C) universal life. 
D) modified life. 
E) variable life. 
A) whole life. 
B) term life. 
C) universal life. 
D) modified life. 
E) variable life.

Question 9

The total debts of you and your spouse include the following: mortgage,$200,000; auto loan,$16,000; credit card balance,$2,000; and personal debts of $4,000.Further,you estimate that your funeral will cost $6,000.Your spouse expects to continue to work after your death.What is your life insurance need using the DINK method?

Accepted Answer

A) $117,000 
B) $120,000 
C) $200,000 
D) $216,000 
E) $222,000 
A) $117,000 
B) $120,000 
C) $200,000 
D) $216,000 
E) $222,000

Question 10

Which one of the following statements correctly applies to term insurance?

Accepted Answer

A) The premiums remain constant. 
B) The policy builds cash value. 
C) Protection is for a specified period of time. 
D) It usually is more expensive than whole life insurance. 
E) The investment performance varies with the stock market. 
A) The premiums remain constant. 
B) The policy builds cash value. 
C) Protection is for a specified period of time. 
D) It usually is more expensive than whole life insurance. 
E) The investment performance varies with the stock market.

Question 11

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee 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

Your life insurance policy is valuable only if it:

Accepted Answer

A) meets your objectives. 
B) makes you rich. 
C) makes your beneficiaries rich. 
D) serves as collateral for a loan. 
E) pays you at least 7.5 percent interest. 
A) meets your objectives. 
B) makes you rich. 
C) makes your beneficiaries rich. 
D) serves as collateral for a loan. 
E) pays you at least 7.5 percent interest.

Question 13

After you buy new life insurance,you have a "free look" period of ________ days.

Accepted Answer

A) 10 
B) 20 
C) 30 
D) 40 
E) 50 
A) 10 
B) 20 
C) 30 
D) 40 
E) 50

Question 14

Jerry Lewis is thinking about purchasing some life insurance.He goes to a company that is owned by shareholders.What type of life insurance company has he visited?

Accepted Answer

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

Question 15

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Accepted Answer

A) True 
 B)False

Question 16

A special form of the limited payment plan is the ________ premium policy.

Accepted Answer

A) double 
B) simple 
C) single 
D) compound 
E) equitable 
A) double 
B) simple 
C) single 
D) compound 
E) equitable

Life insurance proceeds may be used to:

The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-earner's death is known as which of the following estimation methods?

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the major rating agencies.

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Two-earner couples may have a moderate need for life insurance,especially if they have a mortgage or other large debts.

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Cash-value policies may make sense for people who:

The most common type of permanent life insurance is called:

Which one of the following statements correctly applies to term insurance?

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Your life insurance policy is valuable only if it:

After you buy new life insurance,you have a "free look" period of ________ days.

Jerry Lewis is thinking about purchasing some life insurance.He goes to a company that is owned by shareholders.What type of life insurance company has he visited?

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

A special form of the limited payment plan is the ________ premium policy.

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

Exam 12: Life Insurance

Life insurance proceeds may be used to:

The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-earner's death is known as which of the following estimation methods?

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the major rating agencies.

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Two-earner couples may have a moderate need for life insurance,especially if they have a mortgage or other large debts.

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Cash-value policies may make sense for people who:

The most common type of permanent life insurance is called:

Which one of the following statements correctly applies to term insurance?

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Your life insurance policy is valuable only if it:

After you buy new life insurance,you have a "free look" period of ________ days.

Jerry Lewis is thinking about purchasing some life insurance.He goes to a company that is owned by shareholders.What type of life insurance company has he visited?

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

A special form of the limited payment plan is the ________ premium policy.

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