Question 1

Cash dividends are paid only on participating life insurance policies.

Accepted Answer

A) True 
 B)False

Question 2

Using the income for life settlement option,a younger beneficiary would receive a larger annual benefit than an older beneficiary,other factors being equal.

Accepted Answer

A) True 
 B)False

Question 3

The most important feature of a life insurance company is its

Accepted Answer

A) service. 
B) cost comparison index number. 
C) ability to pay its obligations. 
D) insurance agents. 
A) service. 
B) cost comparison index number. 
C) ability to pay its obligations. 
D) insurance agents.

Question 4

The need for life insurance is usually low during retirement.

Accepted Answer

A) True 
 B)False

Question 5

If you receive income from a former spouse through either alimony or child support,life insurance on that person is advisable.

Accepted Answer

A) True 
 B)False

Question 6

If you invest the difference in the cost of term insurance and that of another type of policy,you will always be ahead financially.

Accepted Answer

A) True 
 B)False

Question 7

Married couples should integrate their life insurance plans and combine their life insurance needs in one policy on the life of one of the spouses.

Accepted Answer

A) True 
 B)False

Question 8

Sales commissions charged on term insurance policies purchased directly rather than through an agent average approximately ____ percent.

Accepted Answer

A) 90 
B) 10 
C) 2 to 4 
D) 20 to 50 
A) 90 
B) 10 
C) 2 to 4 
D) 20 to 50

Question 9

You are 33-years old and have children ages 3,6 and 8.You have determined that you need an additional $700,000 in additional life insurance.You should buy.

Accepted Answer

A) one $700,000 5-year, guaranteed renewable term life policy. 
B) one $700,000 cash-value life insurance policy with guaranteed insurability. 
C) 3-5, 5-year, guaranteed renewable term life policies in various amounts adding up to $700,000. 
D) realize that you cannot afford such coverage and simply start saving more in case you die before your children are independent. 
A) one $700,000 5-year, guaranteed renewable term life policy. 
B) one $700,000 cash-value life insurance policy with guaranteed insurability. 
C) 3-5, 5-year, guaranteed renewable term life policies in various amounts adding up to $700,000. 
D) realize that you cannot afford such coverage and simply start saving more in case you die before your children are independent.

Question 10

The policyholder may increase or decrease the amount of premium paid with a variable life insurance policy.

Accepted Answer

A) True 
 B)False

Question 11

A life insurance policy which has been terminated for failure to pay the premium is said to have expired

Accepted Answer

A) True 
 B)False

Question 12

Life insurance sold on-line should be avoided.

Accepted Answer

A) True 
 B)False

Question 13

A survivor's blackout period is the time frame between when a deceased person with minor children stops receiving Social Security survivor benefits and when he or she begins receiving retirement benefits.

Accepted Answer

A) True 
 B)False

Question 14

People with hazardous occupations (police officers) or dangerous hobbies (skydivers) are sometimes required to pay higher insurance premiums.

Accepted Answer

A) True 
 B)False

Question 15

Typically,when one borrows from his or her cash value in a life insurance policy,

Accepted Answer

A) the proceeds paid to a beneficiary are unchanged. 
B) no interest is charged on the loan. 
C) only the guaranteed minimum rate is paid on the remaining nonborrowed cash value. 
D) (All of these) 
A) the proceeds paid to a beneficiary are unchanged. 
B) no interest is charged on the loan. 
C) only the guaranteed minimum rate is paid on the remaining nonborrowed cash value. 
D) (All of these)

Question 16

____ provide the basic descriptive information about the insured person or property,the premium to be paid,the time period of the coverage,and the policy limits.

Accepted Answer

A) Insuring agreements 
B) Endorsements 
C) Declarations 
D) Conditions 
A) Insuring agreements 
B) Endorsements 
C) Declarations 
D) Conditions

Question 17

Cash-value insurance is more expensive than term life insurance because of the savings element included in the cash-value policy.

Accepted Answer

A) True 
 B)False

Question 18

Maxwell has a life insurance policy with a face value of $250,000 and a cash value of $77,000.Maxwell was killed in an auto accident shortly after borrowing $56,000 from this policy.Assuming interest had been paid but no principal was repaid,how much would Maxwell's beneficiary receive?

Accepted Answer

A) $117,000 
B) $173,000 
C) $194,000 
D) $250,000 
A) $117,000 
B) $173,000 
C) $194,000 
D) $250,000

Question 19

The cash value of a variable life insurance policy can fluctuate up and down.

Accepted Answer

A) True 
 B)False

Question 20

A life insurance policy with a lower interest-adjusted cost index (IACI) is generally a better buy than a comparable policy with a higher IACI.

Accepted Answer

A) True 
 B)False

Cash dividends are paid only on participating life insurance policies.

Using the income for life settlement option,a younger beneficiary would receive a larger annual benefit than an older beneficiary,other factors being equal.

The most important feature of a life insurance company is its

The need for life insurance is usually low during retirement.

If you receive income from a former spouse through either alimony or child support,life insurance on that person is advisable.

If you invest the difference in the cost of term insurance and that of another type of policy,you will always be ahead financially.

Married couples should integrate their life insurance plans and combine their life insurance needs in one policy on the life of one of the spouses.

Sales commissions charged on term insurance policies purchased directly rather than through an agent average approximately ____ percent.

You are 33-years old and have children ages 3,6 and 8.You have determined that you need an additional $700,000 in additional life insurance.You should buy.

The policyholder may increase or decrease the amount of premium paid with a variable life insurance policy.

A life insurance policy which has been terminated for failure to pay the premium is said to have expired

Life insurance sold on-line should be avoided.

A survivor's blackout period is the time frame between when a deceased person with minor children stops receiving Social Security survivor benefits and when he or she begins receiving retirement benefits.

People with hazardous occupations (police officers) or dangerous hobbies (skydivers) are sometimes required to pay higher insurance premiums.

Typically,when one borrows from his or her cash value in a life insurance policy,

____ provide the basic descriptive information about the insured person or property,the premium to be paid,the time period of the coverage,and the policy limits.

Cash-value insurance is more expensive than term life insurance because of the savings element included in the cash-value policy.

Maxwell has a life insurance policy with a face value of $250,000 and a cash value of $77,000.Maxwell was killed in an auto accident shortly after borrowing $56,000 from this policy.Assuming interest had been paid but no principal was repaid,how much would Maxwell's beneficiary receive?

The cash value of a variable life insurance policy can fluctuate up and down.

A life insurance policy with a lower interest-adjusted cost index (IACI) is generally a better buy than a comparable policy with a higher IACI.

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

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Exam 12: Life Insurance Planning

Cash dividends are paid only on participating life insurance policies.

Using the income for life settlement option,a younger beneficiary would receive a larger annual benefit than an older beneficiary,other factors being equal.

The most important feature of a life insurance company is its

The need for life insurance is usually low during retirement.

If you receive income from a former spouse through either alimony or child support,life insurance on that person is advisable.

If you invest the difference in the cost of term insurance and that of another type of policy,you will always be ahead financially.

Married couples should integrate their life insurance plans and combine their life insurance needs in one policy on the life of one of the spouses.

Sales commissions charged on term insurance policies purchased directly rather than through an agent average approximately ____ percent.

You are 33-years old and have children ages 3,6 and 8.You have determined that you need an additional $700,000 in additional life insurance.You should buy.

The policyholder may increase or decrease the amount of premium paid with a variable life insurance policy.

A life insurance policy which has been terminated for failure to pay the premium is said to have expired

Life insurance sold on-line should be avoided.

A survivor's blackout period is the time frame between when a deceased person with minor children stops receiving Social Security survivor benefits and when he or she begins receiving retirement benefits.

People with hazardous occupations (police officers) or dangerous hobbies (skydivers) are sometimes required to pay higher insurance premiums.

Typically,when one borrows from his or her cash value in a life insurance policy,

____ provide the basic descriptive information about the insured person or property,the premium to be paid,the time period of the coverage,and the policy limits.

Cash-value insurance is more expensive than term life insurance because of the savings element included in the cash-value policy.

Maxwell has a life insurance policy with a face value of $250,000 and a cash value of $77,000.Maxwell was killed in an auto accident shortly after borrowing $56,000 from this policy.Assuming interest had been paid but no principal was repaid,how much would Maxwell's beneficiary receive?

The cash value of a variable life insurance policy can fluctuate up and down.

A life insurance policy with a lower interest-adjusted cost index (IACI) is generally a better buy than a comparable policy with a higher IACI.

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

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