Exam 13: Life Insurance

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

In the ________ method, life insurance is determined as a multiple of your annual income.

If your life follows the pattern of college-marriage-kids-retirement, your need for life insurance will

Advantages of whole life insurance policies are that they provide long-term coverage, the rates are fixed, and they have a savings or cash value feature.

If no one else relies on your income, life insurance may not be necessary.

The constitutional beneficiary is the person who will receive the death benefits if the primary beneficiary is no longer living when the policyholder dies.

A disadvantage of whole life policies is that

The beneficiaries of life insurance policies can only be family members or those directly affected by a person's death.

Life insurance is an indication of good financial planning, since it provides a payment to the policyholder upon his or her death.

Your need for life insurance will last for 20 years. You also wish to save some money over that same time period. What kind of life insurance would fill these requirements?

Which of the following is not a type of life insurance covered in the text?

The income method, basing life insurance needs on multiples of current income, is the easiest and most accurate method of determining how much life insurance a person should buy.

Life insurance proceeds are generally not taxable to the

If you want to borrow money from the cash value of your whole life policy, the interest rates are relatively high and the terms of the loan are quite strict.

Use the following two columns of items to answer the matching questions below: -decreasing-term insurance A)cash value and benefits to the beneficiary B)combination of term insurance and a savings plan C)premiums constant with reduced benefits D)term insurance with a variable investment portion

Which of the following policies will not give you a cash settlement if you terminate the policy?

The budget method of estimating life insurance needs considers all of the following, except

Use the following two columns of items to answer the matching questions below: -whole life insurance A)cash value and benefits to the beneficiary B)combination of term insurance and a savings plan C)premiums constant with reduced benefits D)term insurance with a variable investment portion

Using the budget method of determining life insurance needs, a family's future expected expenses are considered.

Use the following two columns of items to answer the matching questions below: -income method A)uses annual income times a factor to arrive at the amount of life insurance needed B)determines the life insurance amount needed based on a budget