Question 1

The death benefit of a life insurance policy is always the same amount as the face value.​

Accepted Answer

A) True 
 B)False  False

Question 2

A settlement option for a life insurance policy can be

Accepted Answer

A) a lump sum. 
B) interest income for a period of time with the remainder paid at the end of the period of time. 
C) income for life. 
D) (any of these) 
A) a lump sum. 
B) interest income for a period of time with the remainder paid at the end of the period of time. 
C) income for life. 
D) (any of these) D

Question 3

Nonsmokers are insured at lower life insurance premiums than smokers.

Accepted Answer

A) True 
 B)False  True

Question 4

With a ____ policy,if premiums drop below the amount necessary to cover the insurance protection and expenses,funds are removed from the cash-value account to cover the shortfall.

Accepted Answer

A) variable life insurance 
B) universal life insurance 
C) variable-universal life insurance 
D) cash-value life insurance 
A) variable life insurance 
B) universal life insurance 
C) variable-universal life insurance 
D) cash-value life insurance

Question 5

A return-of-premium rider is an attractive way to invest via life insurance.

Accepted Answer

A) True 
 B)False

Question 6

A living benefit clause provides

Accepted Answer

A) a cash-value loan to the policyholder. 
B) dollar benefits to the insured prior to death if the insured is terminally ill. 
C) cash dividends to the policyholder. 
D) income for life. 
A) a cash-value loan to the policyholder. 
B) dollar benefits to the insured prior to death if the insured is terminally ill. 
C) cash dividends to the policyholder. 
D) income for life.

Question 7

One generally has to have a life insurance policy ten years or more before the cash surrender value amounts to much.

Accepted Answer

A) True 
 B)False

Question 8

The advantage of term insurance is

Accepted Answer

A) stable premiums. 
B) forced savings. 
C) more coverage per premium dollar. 
D) high rates of investment return. 
A) stable premiums. 
B) forced savings. 
C) more coverage per premium dollar. 
D) high rates of investment return.

Question 9

Straight life is a label sometimes used interchangeably with

Accepted Answer

A) term life. 
B) cash value. 
C) whole life. 
D) limited pay. 
A) term life. 
B) cash value. 
C) whole life. 
D) limited pay.

Question 10

All of the following are true except

Accepted Answer

A) buy term and spend the rest. 
B) husbands and wives need their own insurance plans. 
C) you can buy a life insurance policy with one payment 
D) retirees need less, not more, life insurance. 
A) buy term and spend the rest. 
B) husbands and wives need their own insurance plans. 
C) you can buy a life insurance policy with one payment 
D) retirees need less, not more, life insurance.

Question 11

Social Security survivor's benefits end when the youngest child reaches age 21 or graduates from college,whichever comes first.

Accepted Answer

A) True 
 B)False

Question 12

Life insurance needs are ____ until your first child is born,then the need is ____ until the youngest child is ten,and then the need ____ until retirement.

Accepted Answer

A) high; low; increases 
B) high; low; decreases 
C) low; high; increases 
D) low; high; decreases 
A) high; low; increases 
B) high; low; decreases 
C) low; high; increases 
D) low; high; decreases

Question 13

The type of cash-value life insurance that allows you to increase the face value amount without buying a new policy is called modified life insurance.

Accepted Answer

A) True 
 B)False

Question 14

You can save on life insurance by buying policies through fee-only financial planners and fee-for-service insurance agents who specialize in

Accepted Answer

A) indexed universal life policies. 
B) low-load life insurance. 
C) viatical policies. 
D) sliding scale commissions. 
A) indexed universal life policies. 
B) low-load life insurance. 
C) viatical policies. 
D) sliding scale commissions.

Question 15

The amount of Social Security benefits received by survivors depends on the amount of income earned during the lifetime of the deceased that was subject to Social Security taxes.

Accepted Answer

A) True 
 B)False

Question 16

Antonio and Trina are a young couple with two small children, Jason (age four) and Claudia (age two). Trina is an account executive for a brokerage firm while Antonio has taken a couple years off from his profession as a civil engineer to work on an MBA degree. Right now Antonio and Trina's budget is very tight, as they are accustomed to living on two incomes, but Trina's employer has just circulated employer benefit information, so Antonio and Trina believe this is a good time to evaluate their life insurance needs. They have listed the financial information they believe is relevant.
  
-Using the needs-based approach,how much additional life insurance is needed on Trina's life?

Accepted Answer

A) $373,845 
B) $468,750 
C) $525,750 
D) $575,750 
A) $373,845 
B) $468,750 
C) $525,750 
D) $575,750

Question 17

The life insurance policy in which death benefits last a lifetime but premiums are all paid after a specified time period is a(n) ____ life policy.

Accepted Answer

A) limited-pay whole 
B) endowment 
C) universal 
D) modified 
A) limited-pay whole 
B) endowment 
C) universal 
D) modified

Question 18

Which of the following is characteristic of term life insurance?

Accepted Answer

A) Provides no investment features 
B) Costs more than other types of life insurance 
C) Has premiums that decrease over one's lifetime 
D) Pays benefits to the insured when the insured reaches age 65 
A) Provides no investment features 
B) Costs more than other types of life insurance 
C) Has premiums that decrease over one's lifetime 
D) Pays benefits to the insured when the insured reaches age 65

Question 19

With a cash-value life insurance policy,the value of the actual insurance ____ over time,and the value of the savings element ____ over time.

Accepted Answer

A) increases; increases 
B) increases; decreases 
C) decreases; decreases 
D) decreases; increases 
A) increases; increases 
B) increases; decreases 
C) decreases; decreases 
D) decreases; increases

Question 20

The best use of the money saved when you buy term versus cash-value life insurance is for

Accepted Answer

A) the downpayment on a house. 
B) additional health insurance. 
C) a life a better life-style. 
D) investing for the future; especially retirement. 
A) the downpayment on a house. 
B) additional health insurance. 
C) a life a better life-style. 
D) investing for the future; especially retirement.

The death benefit of a life insurance policy is always the same amount as the face value.

A settlement option for a life insurance policy can be

Nonsmokers are insured at lower life insurance premiums than smokers.

With a ____ policy,if premiums drop below the amount necessary to cover the insurance protection and expenses,funds are removed from the cash-value account to cover the shortfall.

A return-of-premium rider is an attractive way to invest via life insurance.

A living benefit clause provides

One generally has to have a life insurance policy ten years or more before the cash surrender value amounts to much.

The advantage of term insurance is

Straight life is a label sometimes used interchangeably with

All of the following are true except

Social Security survivor's benefits end when the youngest child reaches age 21 or graduates from college,whichever comes first.

Life insurance needs are until your first child is born,then the need is until the youngest child is ten,and then the need until retirement.

The type of cash-value life insurance that allows you to increase the face value amount without buying a new policy is called modified life insurance.

You can save on life insurance by buying policies through fee-only financial planners and fee-for-service insurance agents who specialize in

The amount of Social Security benefits received by survivors depends on the amount of income earned during the lifetime of the deceased that was subject to Social Security taxes.

The life insurance policy in which death benefits last a lifetime but premiums are all paid after a specified time period is a(n) ____ life policy.

Which of the following is characteristic of term life insurance?

With a cash-value life insurance policy,the value of the actual insurance over time,and the value of the savings element over time.

The best use of the money saved when you buy term versus cash-value life insurance is for

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

Exam 12: Life Insurance Planning

The death benefit of a life insurance policy is always the same amount as the face value.​

A settlement option for a life insurance policy can be

Nonsmokers are insured at lower life insurance premiums than smokers.

With a ____ policy,if premiums drop below the amount necessary to cover the insurance protection and expenses,funds are removed from the cash-value account to cover the shortfall.

A return-of-premium rider is an attractive way to invest via life insurance.

A living benefit clause provides

One generally has to have a life insurance policy ten years or more before the cash surrender value amounts to much.

The advantage of term insurance is

Straight life is a label sometimes used interchangeably with

All of the following are true except

Social Security survivor's benefits end when the youngest child reaches age 21 or graduates from college,whichever comes first.

Life insurance needs are ____ until your first child is born,then the need is ____ until the youngest child is ten,and then the need ____ until retirement.

The type of cash-value life insurance that allows you to increase the face value amount without buying a new policy is called modified life insurance.

You can save on life insurance by buying policies through fee-only financial planners and fee-for-service insurance agents who specialize in

The amount of Social Security benefits received by survivors depends on the amount of income earned during the lifetime of the deceased that was subject to Social Security taxes.

The life insurance policy in which death benefits last a lifetime but premiums are all paid after a specified time period is a(n) ____ life policy.

Which of the following is characteristic of term life insurance?

With a cash-value life insurance policy,the value of the actual insurance ____ over time,and the value of the savings element ____ over time.

The best use of the money saved when you buy term versus cash-value life insurance is for

Understanding Personal Finance

Career Planning

Financial Statements,tools,and Budgets

Managing Income Taxes

Managing Checking and Savings Accounts

Building and Maintaining Good Credit

Credit Cards and Consumer Loans

Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

Investment Fundamentals

Investing in Stocks and Bonds

Mutual Funds and Exchange Traded Funds

Real Estate and High-Risk Investments

Retirement and Estate Planning

Filters

The death benefit of a life insurance policy is always the same amount as the face value.

Life insurance needs are until your first child is born,then the need is until the youngest child is ten,and then the need until retirement.

With a cash-value life insurance policy,the value of the actual insurance over time,and the value of the savings element over time.