Question 1

Settlement options for life insurance proceeds include all of the following except

Accepted Answer

A) lump sum. 
B) interest income. 
C) income for a specific period. 
D) additional paid-up insurance. 
A) lump sum. 
B) interest income. 
C) income for a specific period. 
D) additional paid-up insurance.

Question 2

The premiums for newly purchased cash-value policies are always higher than those for term policies providing the same amount of coverage.

Accepted Answer

A) True 
 B)False

Question 3

Debt payments can be handled through either debt-repayment needs or ____ needs.

Accepted Answer

A) income-replacement 
B) final-expense 
C) readjustment-period 
D) college-expense 
A) income-replacement 
B) final-expense 
C) readjustment-period 
D) college-expense

Question 4

As a family matures,savings and investments may exceed potential losses from premature death and reduce or eliminate the need for life insurance.

Accepted Answer

A) True 
 B)False

Question 5

Tara had a life insurance policy with a face value of $150,000.At the time of her death,the policy had a cash value of $33,000,an outstanding loan of $4,000,and earned but unpaid dividends of $2,000.Assuming this is a typical policy,what death benefit would be paid to Tara's beneficiary?

Accepted Answer

A) $146,000 
B) $150,000 
C) $148,000 
D) $152,000 
A) $146,000 
B) $150,000 
C) $148,000 
D) $152,000

Question 6

Younger families should be wary of using retirement money for living expenses after the death of an income provider.

Accepted Answer

A) True 
 B)False

Question 7

The most accurate and complex method of calculating life insurance needs is the

Accepted Answer

A) needs-based approach. 
B) multiple-of-earnings approach. 
C) value-of-life approach. 
D) term life approach. 
A) needs-based approach. 
B) multiple-of-earnings approach. 
C) value-of-life approach. 
D) term life approach.

Question 8

With cash-value life insurance the actual amount of insurance goes down over time while the amount of investment value goes up with the two components adding up to the face amount of the policy.

Accepted Answer

A) True 
 B)False

Question 9

Ratings of the financial strengths of insurance companies are available from

Accepted Answer

A) Standard & Poors. 
B) FDIC. 
C) A.M. Best Company. 
D) both Standard & Poors and A.M. Best Company. 
A) Standard & Poors. 
B) FDIC. 
C) A.M. Best Company. 
D) both Standard & Poors and A.M. Best Company.

Question 10

Premium payments for a cash-value life insurance policy are tax deductible.

Accepted Answer

A) True 
 B)False

Question 11

With decreasing term insurance,often the face amount of coverage declines annually while the premiums also decline.

Accepted Answer

A) True 
 B)False

Question 12

With a decreasing term policy,the face value amount ____ annually and the premiums ____ annually.

Accepted Answer

A) decreases; decrease 
B) decreases; remain constant 
C) remains constant; decrease 
D) remains constant; remain constant 
A) decreases; decrease 
B) decreases; remain constant 
C) remains constant; decrease 
D) remains constant; remain constant

Question 13

An incontestability clause places a time limit on the right of an insurance company to deny a claim.

Accepted Answer

A) True 
 B)False

Question 14

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.
  
-Given Antonio and Trina's need for life insurance and their tight budget,which type of life insurance should the Tysons purchase?

Accepted Answer

A) Limited-pay term life 
B) Guaranteed renewable term 
C) Whole life 
D) Variable-universal life 
A) Limited-pay term life 
B) Guaranteed renewable term 
C) Whole life 
D) Variable-universal life

Question 15

The primary person who is intended to be provided for by a life insurance policy is the

Accepted Answer

A) beneficiary. 
B) contingent beneficiary. 
C) policyholder. 
D) insured. 
A) beneficiary. 
B) contingent beneficiary. 
C) policyholder. 
D) insured.

Question 16

Which of the following rates of return in a cash-value life insurance policy does the agent tend to focus on and which should the purchaser focus on?

Accepted Answer

A) guaranteed minimum; current 
B) current; guaranteed minimum 
C) fixed; current 
D) current; projected 
A) guaranteed minimum; current 
B) current; guaranteed minimum 
C) fixed; current 
D) current; projected

Question 17

The person who controls all rights granted by a life insurance policy is called the

Accepted Answer

A) beneficiary. 
B) contingent beneficiary. 
C) policyholder. 
D) insured. 
A) beneficiary. 
B) contingent beneficiary. 
C) policyholder. 
D) insured.

Question 18

Insurance dividends may be

Accepted Answer

A) received in cash. 
B) left with the insurance company to earn interest. 
C) used to buy small amounts of paid-up life insurance. 
D) (all of these) 
A) received in cash. 
B) left with the insurance company to earn interest. 
C) used to buy small amounts of paid-up life insurance. 
D) (all of these)

Question 19

The need for life insurance is high until your first child is born.

Accepted Answer

A) True 
 B)False

Question 20

The rate at which cash value accumulates depends on the rate of return earned.

Accepted Answer

A) True 
 B)False

Settlement options for life insurance proceeds include all of the following except

The premiums for newly purchased cash-value policies are always higher than those for term policies providing the same amount of coverage.

Debt payments can be handled through either debt-repayment needs or ____ needs.

As a family matures,savings and investments may exceed potential losses from premature death and reduce or eliminate the need for life insurance.

Tara had a life insurance policy with a face value of $150,000.At the time of her death,the policy had a cash value of $33,000,an outstanding loan of $4,000,and earned but unpaid dividends of $2,000.Assuming this is a typical policy,what death benefit would be paid to Tara's beneficiary?

Younger families should be wary of using retirement money for living expenses after the death of an income provider.

The most accurate and complex method of calculating life insurance needs is the

With cash-value life insurance the actual amount of insurance goes down over time while the amount of investment value goes up with the two components adding up to the face amount of the policy.

Ratings of the financial strengths of insurance companies are available from

Premium payments for a cash-value life insurance policy are tax deductible.

With decreasing term insurance,often the face amount of coverage declines annually while the premiums also decline.

With a decreasing term policy,the face value amount annually and the premiums annually.

An incontestability clause places a time limit on the right of an insurance company to deny a claim.

The primary person who is intended to be provided for by a life insurance policy is the

Which of the following rates of return in a cash-value life insurance policy does the agent tend to focus on and which should the purchaser focus on?

The person who controls all rights granted by a life insurance policy is called the

Insurance dividends may be

The need for life insurance is high until your first child is born.

The rate at which cash value accumulates depends on the rate of return earned.

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

Settlement options for life insurance proceeds include all of the following except

The premiums for newly purchased cash-value policies are always higher than those for term policies providing the same amount of coverage.

Debt payments can be handled through either debt-repayment needs or ____ needs.

As a family matures,savings and investments may exceed potential losses from premature death and reduce or eliminate the need for life insurance.

Tara had a life insurance policy with a face value of $150,000.At the time of her death,the policy had a cash value of $33,000,an outstanding loan of $4,000,and earned but unpaid dividends of $2,000.Assuming this is a typical policy,what death benefit would be paid to Tara's beneficiary?

Younger families should be wary of using retirement money for living expenses after the death of an income provider.

The most accurate and complex method of calculating life insurance needs is the

With cash-value life insurance the actual amount of insurance goes down over time while the amount of investment value goes up with the two components adding up to the face amount of the policy.

Ratings of the financial strengths of insurance companies are available from

Premium payments for a cash-value life insurance policy are tax deductible.

With decreasing term insurance,often the face amount of coverage declines annually while the premiums also decline.

With a decreasing term policy,the face value amount ____ annually and the premiums ____ annually.

An incontestability clause places a time limit on the right of an insurance company to deny a claim.

The primary person who is intended to be provided for by a life insurance policy is the

Which of the following rates of return in a cash-value life insurance policy does the agent tend to focus on and which should the purchaser focus on?

The person who controls all rights granted by a life insurance policy is called the

Insurance dividends may be

The need for life insurance is high until your first child is born.

The rate at which cash value accumulates depends on the rate of return earned.

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

With a decreasing term policy,the face value amount annually and the premiums annually.