Question 1

The promise not to smoke in exchange for lower life insurance premiums would be included in the ____ section of an insurance policy.

Accepted Answer

A) declarations 
B) exclusions 
C) conditions 
D) endorsements 
A) declarations 
B) exclusions 
C) conditions 
D) endorsements

Question 2

Endorsements may be added at any time during the life of an insurance policy to

Accepted Answer

A) expand coverage. 
B) raise policy limits. 
C) make other changes. 
D) (All of these) 
A) expand coverage. 
B) raise policy limits. 
C) make other changes. 
D) (All of these)

Question 3

Life insurance is the best way to address the "living-too-long" problem.

Accepted Answer

A) True 
 B)False

Question 4

Parents with minor children almost always need life insurance.

Accepted Answer

A) True 
 B)False

Question 5

Readjustment-period needs typically last about one month.

Accepted Answer

A) True 
 B)False

Question 6

Insurance companies can easily rig their dividend and cash value accumulations to look especially good at specific points in time and thus produce favorable interest-adjusted cost indexes.​

Accepted Answer

A) True 
 B)False

Question 7

Convertible term offers the policyholder the option of exchanging a term policy for a cash-value policy without evidence of insurability.​

Accepted Answer

A) True 
 B)False

Question 8

When purchasing a term life policy,it is generally best to purchase a guaranteed renewable policy.

Accepted Answer

A) True 
 B)False

Question 9

Term insurance is more profitable for the life insurance companies and agents than cash-value insurance.

Accepted Answer

A) True 
 B)False

Question 10

When using the "buy term and invest the rest" strategy,the easiest way to ensure your money is actually invested is to set up

Accepted Answer

A) an automatic investment program (AIP) with a mutual fund. 
B) cash-value life insurance. 
C) cash-value life insurance 
D) a settlement option plan. 
A) an automatic investment program (AIP) with a mutual fund. 
B) cash-value life insurance. 
C) cash-value life insurance 
D) a settlement option plan.

Question 11

For families with children the bulk of their life insurance need relates to their

Accepted Answer

A) final-expense. 
B) readjustment-period. 
C) debt-repayment. 
D) income-replacement. 
A) final-expense. 
B) readjustment-period. 
C) debt-repayment. 
D) income-replacement.

Question 12

Determining the magnitude of possible losses from a premature death can be complicated.The best method is the

Accepted Answer

A) actuarial method. 
B) multiple-of-earnings approach. 
C) needs-based approach. 
D) return on investment method. 
A) actuarial method. 
B) multiple-of-earnings approach. 
C) needs-based approach. 
D) return on investment method.

Question 13

Group term life insurance would be especially beneficial for persons who

Accepted Answer

A) are young. 
B) have no dependents. 
C) have health problems. 
D) need a savings program. 
A) are young. 
B) have no dependents. 
C) have health problems. 
D) need a savings program.

Question 14

Life insurance should be bought primarily

Accepted Answer

A) as a tax shelter. 
B) to provide protection from financial losses. 
C) as an investment. 
D) as a gift. 
A) as a tax shelter. 
B) to provide protection from financial losses. 
C) as an investment. 
D) as a gift.

Question 15

Limited-pay whole life insurance is whole life insurance that allows premium payments to cease before you reach the age of 100.

Accepted Answer

A) True 
 B)False

Question 16

If a beneficiary wants to make sure that the life insurance proceeds being paid out are not exhausted before he or she dies,the beneficiary would choose which of the following settlement options?

Accepted Answer

A) Lump sum or income for life 
B) Income for life or interest income 
C) Interest income or income for a specific period 
D) Income of a specific amount or income for a specific period 
A) Lump sum or income for life 
B) Income for life or interest income 
C) Interest income or income for a specific period 
D) Income of a specific amount or income for a specific period

Question 17

An automatic premium loan provides an open-ended line of credit from which the policyholder can borrow money.

Accepted Answer

A) True 
 B)False

Question 18

Jonna purchased a $25,000 cash value policy with a guaranteed insurability option that can be exercised a maximum of four times at $25,000,each over the next 12 years.Which of the following statements is false?

Accepted Answer

A) Jonna will be able to accumulate a total $125,000 in insurance over the next 12 years. 
B) Jonna will pay an extra premium amount for the guaranteed insurability option. 
C) The total premium for her coverage will increase each time she exercises a purchase option. 
D) Jonna will have to prove she is still insurable each time she exercises a purchase option. 
A) Jonna will be able to accumulate a total $125,000 in insurance over the next 12 years. 
B) Jonna will pay an extra premium amount for the guaranteed insurability option. 
C) The total premium for her coverage will increase each time she exercises a purchase option. 
D) Jonna will have to prove she is still insurable each time she exercises a purchase option.

Question 19

Marvin was widowed at age 38 when his children were 8 and 10 years of age.Assuming his deceased spouse was eligible for Social Security survivor's benefits,how many years would Marvin be in the "blackout period"?

Accepted Answer

A) 0 years 
B) 10 years 
C) 12 years 
D) 13 years 
A) 0 years 
B) 10 years 
C) 12 years 
D) 13 years

Question 20

Which of the following is not characteristic of a cash-value life insurance policy?

Accepted Answer

A) The annual premiums remain constant. 
B) The beneficiary receives the sum of the face amount and the cash value. 
C) The policyholder can cancel the policy and receive the cash value. 
D) The policyholder can borrow from the cash value. 
A) The annual premiums remain constant. 
B) The beneficiary receives the sum of the face amount and the cash value. 
C) The policyholder can cancel the policy and receive the cash value. 
D) The policyholder can borrow from the cash value.

The promise not to smoke in exchange for lower life insurance premiums would be included in the ____ section of an insurance policy.

Endorsements may be added at any time during the life of an insurance policy to

Life insurance is the best way to address the "living-too-long" problem.

Parents with minor children almost always need life insurance.

Readjustment-period needs typically last about one month.

Insurance companies can easily rig their dividend and cash value accumulations to look especially good at specific points in time and thus produce favorable interest-adjusted cost indexes.

Convertible term offers the policyholder the option of exchanging a term policy for a cash-value policy without evidence of insurability.

When purchasing a term life policy,it is generally best to purchase a guaranteed renewable policy.

Term insurance is more profitable for the life insurance companies and agents than cash-value insurance.

When using the "buy term and invest the rest" strategy,the easiest way to ensure your money is actually invested is to set up

For families with children the bulk of their life insurance need relates to their

Determining the magnitude of possible losses from a premature death can be complicated.The best method is the

Group term life insurance would be especially beneficial for persons who

Life insurance should be bought primarily

Limited-pay whole life insurance is whole life insurance that allows premium payments to cease before you reach the age of 100.

If a beneficiary wants to make sure that the life insurance proceeds being paid out are not exhausted before he or she dies,the beneficiary would choose which of the following settlement options?

An automatic premium loan provides an open-ended line of credit from which the policyholder can borrow money.

Jonna purchased a $25,000 cash value policy with a guaranteed insurability option that can be exercised a maximum of four times at $25,000,each over the next 12 years.Which of the following statements is false?

Marvin was widowed at age 38 when his children were 8 and 10 years of age.Assuming his deceased spouse was eligible for Social Security survivor's benefits,how many years would Marvin be in the "blackout period"?

Which of the following is not characteristic of a cash-value life insurance policy?

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Managing Checking and Savings Accounts

Building and Maintaining Good Credit

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Vehicles and Other Major Purchases

Obtaining Affordable Housing

Managing Property and Liability Risk

Managing Health Expenses

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Exam 12: Life Insurance Planning

The promise not to smoke in exchange for lower life insurance premiums would be included in the ____ section of an insurance policy.

Endorsements may be added at any time during the life of an insurance policy to

Life insurance is the best way to address the "living-too-long" problem.

Parents with minor children almost always need life insurance.

Readjustment-period needs typically last about one month.

Insurance companies can easily rig their dividend and cash value accumulations to look especially good at specific points in time and thus produce favorable interest-adjusted cost indexes.​

Convertible term offers the policyholder the option of exchanging a term policy for a cash-value policy without evidence of insurability.​

When purchasing a term life policy,it is generally best to purchase a guaranteed renewable policy.

Term insurance is more profitable for the life insurance companies and agents than cash-value insurance.

When using the "buy term and invest the rest" strategy,the easiest way to ensure your money is actually invested is to set up

For families with children the bulk of their life insurance need relates to their

Determining the magnitude of possible losses from a premature death can be complicated.The best method is the

Group term life insurance would be especially beneficial for persons who

Life insurance should be bought primarily

Limited-pay whole life insurance is whole life insurance that allows premium payments to cease before you reach the age of 100.

If a beneficiary wants to make sure that the life insurance proceeds being paid out are not exhausted before he or she dies,the beneficiary would choose which of the following settlement options?

An automatic premium loan provides an open-ended line of credit from which the policyholder can borrow money.

Jonna purchased a $25,000 cash value policy with a guaranteed insurability option that can be exercised a maximum of four times at $25,000,each over the next 12 years.Which of the following statements is false?

Marvin was widowed at age 38 when his children were 8 and 10 years of age.Assuming his deceased spouse was eligible for Social Security survivor's benefits,how many years would Marvin be in the "blackout period"?

Which of the following is not characteristic of a cash-value life insurance policy?

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

Insurance companies can easily rig their dividend and cash value accumulations to look especially good at specific points in time and thus produce favorable interest-adjusted cost indexes.

Convertible term offers the policyholder the option of exchanging a term policy for a cash-value policy without evidence of insurability.