Exam 8: Insuring Your Life

When cash value is withdrawn from a life insurance policy it is always tax free.

Term insurance is generally the most economical form of life insurance for young families.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The life insurance policy that clearly separates the protection and savings elements is [whole life | universal life].

When you stop making premium payments on a whole life policy,the protection is immediately forfeited.

The death benefit of ____ life insurance may go down due to poor investment returns.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A life insurance agent who takes her profession seriously is likely to have earned the [CPCU | CLU] professional certification.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If a loss is certain to occur,there is [a | no] risk.

Cash value will not be forfeited to the insurance company for non-payment of a premium,but will instead always accrue to the benefit of the policy owner.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -If neither the primary nor secondary beneficiary survives the insured,the life insurance proceeds will be [kept by the insurance company | paid to the state in which the insured lived | paid to the estate of the insured and are distributed by the probate court].

Nonforfeiture rights guarantee that a policy owner will not lose his or her ____.

Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires to pay in premiums from now on.He has purchased a face value of $100,000 and can accumulate cash value.What type of life insurance has Kurt purchased?

Group life insurance is usually term life insurance.

Level premium term policies have become much more popular than annual renewable term policies in recent years.

Unbundling in universal life insurance means that the cost of the insurance and savings elements are identified separately for the policy owner to see.

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

One should typically name both primary and contingent beneficiaries for life insurance policies.

Life insurance policy loans are generally not taxable in the year taken and not deductible in the year repaid.

For the insured who needs more life insurance,the best option for receiving policy dividends is to

Alice is 40 years old and earns $35,000 annually.The multiple earnings approach to determine the amount of life insurance needed shows that she should have 6.5 times her earnings.How much insurance should Alice have? (Show all work.)

Which of the following types of policies is most likely to allow you to switch investments?