Exam 13: Life Insurance

Which type of life insurance is typically provided by an employer as part of the employee benefits package?

Term life insurance is

Use the following two columns of items to answer the matching questions below: -budget 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

You are putting $100 a month into a passbook savings account to pay for your child's college education. You worry that if you die before you have enough saved, your child will not be able to afford a college education. Which of the following types of life insurance would best fit your needs at the lowest cost?

The best substitute for mortgage insurance would be ________ insurance.

Why is the A.M. Best rating of the insurance company from whom you plan to purchase a life insurance policy important?

If your financial plan objective is to provide your family with the most insurance benefit in the event of your untimely death, you should purchase

If you determine your life insurance needs by considering your annual living expenses, special future expenses, debt, job marketability of spouse, and value of existing savings, you are using the ________ method.

Which of the following does not represent a financial goal related to life insurance?

How much insurance would be needed in order to provide for a family for 20 years if the pretax income necessary to cover living expenses is $50,000 and the money can be invested at 6%?

The more savings a household has accumulated, the less life insurance they will need.

Term life insurance is considered temporary insurance, since the policy is only in effect for a specified period of time.

Life insurance that provides insurance over a specified term and allows policyholders to invest residual funds in various types of investments is known as

What are the three most popular types of life insurance?

Describe the two methods used to determine the amount of life insurance needed.

If you wanted to provide more coverage for your family early in life when they need it the most and decrease the amount of benefits in later years, yet continue to pay the same premiums, you should buy a ________ policy.

Life insurance proceeds are not used to

The income method, used to calculate your life insurance coverage, multiplies your current annual income by

The least expensive form of life insurance is

Use the following two columns of items to answer the matching questions below: -lump-sum settlement A)a single payment to the beneficiary B)alternative ways a beneficiary can receive benefits C)Lump-sum, installment payments, and interest payments.