Question 1

With COBRA coverage, the employer pays the premiums.

Accepted Answer

A) True 
 B)False

Question 2

What are the main features of whole life insurance?

Accepted Answer

A)  The premiums stay constant for your entire life. 
B)  The nonforfeiture right allows you access to the cash value account if needed. 
C)  It provides your with permanent insurance regardless of age and health issues. 
D)  All of the above are correct. 
E)  All but B are correct. 
A)  The premiums stay constant for your entire life. 
B)  The nonforfeiture right allows you access to the cash value account if needed. 
C)  It provides your with permanent insurance regardless of age and health issues. 
D)  All of the above are correct. 
E)  All but B are correct.

Question 3

What are the disadvantages of group term insurance?

Accepted Answer

A)  The premiums are usually subsidized by the employer. 
B)  The cost to covert from group coverage to individual coverage if you leave the company may be cost prohibitive. 
C)  Relying on group insurance may hinder your decision to leave the company. 
D)  Both B and C are correct. 
A)  The premiums are usually subsidized by the employer. 
B)  The cost to covert from group coverage to individual coverage if you leave the company may be cost prohibitive. 
C)  Relying on group insurance may hinder your decision to leave the company. 
D)  Both B and C are correct.

Question 4

Policies define people as disabled if they can't perform

Accepted Answer

A)  the duties of their own occupation. 
B)  the duties of any occupation for which they are reasonably suited. 
C)  their own occupation for the first two years of their disability, and thereafter if they can't perform any occupation for which they are reasonably suited. 
D)  All of the above could be correct, it varies with the policy. 
A)  the duties of their own occupation. 
B)  the duties of any occupation for which they are reasonably suited. 
C)  their own occupation for the first two years of their disability, and thereafter if they can't perform any occupation for which they are reasonably suited. 
D)  All of the above could be correct, it varies with the policy.

Question 5

Charles is the sole beneficiary of his late uncle's life insurance policy. The face value of the policy is $785,000. Charles has decided to accept annual annuity payments of $95,000. The interest rate on the policy is 5%. How many annual payments will Charles receive from this policy?

Accepted Answer

A)  7.08 years worth of payments 
B)  8.26 years worth of payments 
C)  10.92 years worth of payments 
D)  none of the above 
A)  7.08 years worth of payments 
B)  8.26 years worth of payments 
C)  10.92 years worth of payments 
D)  none of the above

Question 6

Most long-term care policies require the insured to be unable to perform one or more activities of daily living (ADLs) without assistance. Which of these is included?

Accepted Answer

A)  walking 
B)  eating 
C)  exercising 
D)  dressing 
E)  A, B, and D are included. 
A)  walking 
B)  eating 
C)  exercising 
D)  dressing 
E)  A, B, and D are included.

Question 7

A ________ is a savings plan offered by some employers that allows each employee to have pretax earnings deposited into a specially designated account for paying qualified medical and dependant care bills.

Accepted Answer

A)  medical distribution account 
B)  planned provider account 
C)  group practice plan 
D)  flexible spending account 
E)  planned reimbursement account 
A)  medical distribution account 
B)  planned provider account 
C)  group practice plan 
D)  flexible spending account 
E)  planned reimbursement account

Question 8

All of the following are types of life insurance annuity settlements except

Accepted Answer

A)  straight life annuity. 
B)  period certain annuity. 
C)  refund annuity. 
D)  joint life and survivorship annuity. 
E)  variable annuity. 
A)  straight life annuity. 
B)  period certain annuity. 
C)  refund annuity. 
D)  joint life and survivorship annuity. 
E)  variable annuity.

Question 9

What is the purpose of companies such as A.M.Best, Moody's and Standard & Poor's?

Accepted Answer

A)  They sell life insurance directly to consumers without agents. 
B)  They evaluate and rate the financial stability of the insurance industry. 
C)  They provide reinsurance coverage to the insurance industry. 
D)  They sell low cost term insurance via the Internet. 
A)  They sell life insurance directly to consumers without agents. 
B)  They evaluate and rate the financial stability of the insurance industry. 
C)  They provide reinsurance coverage to the insurance industry. 
D)  They sell low cost term insurance via the Internet.

Question 10

Explain the advantages and disadvantages of medical reimbursement accounts.

Accepted Answer

An employee is allowed to deposit pretax

Question 11

One of the best features of term insurance is that you are able to borrow against the face value.

Accepted Answer

A) True 
 B)False

Question 12

Under a managed health care or prepaid plan you have a good deal of freedom to choose your doctors and hospitals.

Accepted Answer

A) True 
 B)False

Question 13

Define disability insurance and give the common sources of it.

Accepted Answer

Disability insurance is earning-power in

Question 14

Describe the pros and cons of major medical insurance.

Accepted Answer

Major medical covers medical costs beyon

Question 15

Your grandmother has just turned 65 years old and is now eligible for Medicare. She asks you whether or not she should also purchase Medigap insurance. What would you tell her to do?

Accepted Answer

A)  No, Medicare is a very comprehensive coverage so you won't need any additional coverage. 
B)  Yes, Medicare is very complicated and there are areas not covered so it would be a good idea to purchase additional coverage. 
A)  No, Medicare is a very comprehensive coverage so you won't need any additional coverage. 
B)  Yes, Medicare is very complicated and there are areas not covered so it would be a good idea to purchase additional coverage.

Question 16

Joleene is a single parent with two children and earns $45,000 per year. She is purchasing term life insurance for 15 years until her youngest child is self supporting. Assuming her survivors can receive a 3% after-tax, inflation return on insurance proceeds, use the earnings multiple approach to calculate the face value of Joleen's policy.

Accepted Answer

A)  $33,445 
B)  $547,851 
C)  $397,548 
D)  $556,668 
E)  none of the above 
A)  $33,445 
B)  $547,851 
C)  $397,548 
D)  $556,668 
E)  none of the above

Question 17

Long-term care insurance provides money to help pay for nursing home and home health care expenses.

Accepted Answer

A) True 
 B)False

Question 18

Long-term disability will replace 100% of your income while you are unable to return to work.

Accepted Answer

A) True 
 B)False

Question 19

With decreasing term insurance

Accepted Answer

A)  the premiums remain constant, but the face amount of the policy declines. 
B)  the premiums decline, and the face amount of the policy declines. 
C)  the premiums remain constant, and the face amount of the policy remains constant. 
D)  the premiums decline, and the face amount of the policy increases. 
A)  the premiums remain constant, but the face amount of the policy declines. 
B)  the premiums decline, and the face amount of the policy declines. 
C)  the premiums remain constant, and the face amount of the policy remains constant. 
D)  the premiums decline, and the face amount of the policy increases.

Question 20

With the needs approach, you should take into consideration any additional insurance policies that have been taken out on your life.

Accepted Answer

A) True 
 B)False

With COBRA coverage, the employer pays the premiums.

What are the main features of whole life insurance?

What are the disadvantages of group term insurance?

Policies define people as disabled if they can't perform

Charles is the sole beneficiary of his late uncle's life insurance policy. The face value of the policy is $785,000. Charles has decided to accept annual annuity payments of $95,000. The interest rate on the policy is 5%. How many annual payments will Charles receive from this policy?

Most long-term care policies require the insured to be unable to perform one or more activities of daily living (ADLs) without assistance. Which of these is included?

A ________ is a savings plan offered by some employers that allows each employee to have pretax earnings deposited into a specially designated account for paying qualified medical and dependant care bills.

All of the following are types of life insurance annuity settlements except

What is the purpose of companies such as A.M.Best, Moody's and Standard & Poor's?

Explain the advantages and disadvantages of medical reimbursement accounts.

One of the best features of term insurance is that you are able to borrow against the face value.

Under a managed health care or prepaid plan you have a good deal of freedom to choose your doctors and hospitals.

Define disability insurance and give the common sources of it.

Describe the pros and cons of major medical insurance.

Your grandmother has just turned 65 years old and is now eligible for Medicare. She asks you whether or not she should also purchase Medigap insurance. What would you tell her to do?

Long-term care insurance provides money to help pay for nursing home and home health care expenses.

Long-term disability will replace 100% of your income while you are unable to return to work.

With decreasing term insurance

With the needs approach, you should take into consideration any additional insurance policies that have been taken out on your life.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters

Exam 9: Life and Health Insurance

With COBRA coverage, the employer pays the premiums.

What are the main features of whole life insurance?

What are the disadvantages of group term insurance?

Policies define people as disabled if they can't perform

Charles is the sole beneficiary of his late uncle's life insurance policy. The face value of the policy is $785,000. Charles has decided to accept annual annuity payments of $95,000. The interest rate on the policy is 5%. How many annual payments will Charles receive from this policy?

Most long-term care policies require the insured to be unable to perform one or more activities of daily living (ADLs) without assistance. Which of these is included?

A ________ is a savings plan offered by some employers that allows each employee to have pretax earnings deposited into a specially designated account for paying qualified medical and dependant care bills.

All of the following are types of life insurance annuity settlements except

What is the purpose of companies such as A.M.Best, Moody's and Standard & Poor's?

Explain the advantages and disadvantages of medical reimbursement accounts.

One of the best features of term insurance is that you are able to borrow against the face value.

Under a managed health care or prepaid plan you have a good deal of freedom to choose your doctors and hospitals.

Define disability insurance and give the common sources of it.

Describe the pros and cons of major medical insurance.

Your grandmother has just turned 65 years old and is now eligible for Medicare. She asks you whether or not she should also purchase Medigap insurance. What would you tell her to do?

Long-term care insurance provides money to help pay for nursing home and home health care expenses.

Long-term disability will replace 100% of your income while you are unable to return to work.

With decreasing term insurance

With the needs approach, you should take into consideration any additional insurance policies that have been taken out on your life.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: The Role of Open Credit

Using Consumer Loans: The Role of Planned Borrowing

The Home and Automobile Decision

Property and Liability Insurance

Investment Basics

Securities Markets

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: An Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Events Fitting the Pieces Together

Filters