Question 1

The interest-adjusted cost index method provides an accurate means of comparing among greatly different types of policies.

Accepted Answer

A) True 
 B)False

Question 2

Adriana is financially responsible for her aged parents.She wants to provide income for her parents for 15 years should she die.Adriana earns $48,000 after taxes and believes that her parents could live on 60 percent of her current income.If the insurance funds could be invested at 4 percent after taxes and inflation,how much life insurance does Adriana need? The approximate interest factor is 11.9.

Accepted Answer

A) $228,480 
B) $342,720 
C) $432,000 
D) $571,200 
A) $228,480 
B) $342,720 
C) $432,000 
D) $571,200

Question 3

____ should be considered when evaluating income-replacement needs.

Accepted Answer

A) Lost income of the deceased 
B) The value of employment fringe benefits 
C) Contributions of a spouse's income 
D) (all of these) 
A) Lost income of the deceased 
B) The value of employment fringe benefits 
C) Contributions of a spouse's income 
D) (all of these)

Question 4

Surviving spouses under age 60 may only collect Social Security survivor's benefits if there are also surviving children under age 18.

Accepted Answer

A) True 
 B)False

Question 5

A survivorship joint life policy pays when the last person covered dies.

Accepted Answer

A) True 
 B)False

Question 6

The rate of return on cash-value life insurance has historically been well ahead of what can be achieved by a diversified portfolio of stock and bond mutual funds.

Accepted Answer

A) True 
 B)False

Question 7

If Brent is concerned about not being able to pay his life insurance premium should he become disabled,he should consider a policy with

Accepted Answer

A) a waiver of premium. 
B) cash dividends. 
C) a multiple indemnity clause. 
D) a guaranteed insurability option. 
A) a waiver of premium. 
B) cash dividends. 
C) a multiple indemnity clause. 
D) a guaranteed insurability option.

Question 8

The face value of an insurance policy is never received by the beneficiary when the interest income settlement option is chosen.

Accepted Answer

A) True 
 B)False

Question 9

​
  
What is the maximum amount William could borrow from this policy if it has been in force ten years?

Accepted Answer

A) $17,225 
B) $14,250 
C) $7,950 
D) $6,500 
A) $17,225 
B) $14,250 
C) $7,950 
D) $6,500

Question 10

____ life insurance policies possess the greatest investment risk to the policyholder.

Accepted Answer

A) Variable-universal 
B) Term 
C) Whole 
D) Endowment 
A) Variable-universal 
B) Term 
C) Whole 
D) Endowment

Question 11

Cash dividends on life insurance policies are considered taxable as income by the IRS.

Accepted Answer

A) True 
 B)False

Question 12

A fundamental decision to make when buying life insurance is whether to purchase term insurance or cash-value insurance.

Accepted Answer

A) True 
 B)False

Question 13

A substantial benefit for working families with young children should a parent die are

Accepted Answer

A) Social Security retirement benefits. 
B) Social Security survivor's benefits. 
C) Medicare benefits. 
D) Social Security disability benefits. 
A) Social Security retirement benefits. 
B) Social Security survivor's benefits. 
C) Medicare benefits. 
D) Social Security disability benefits.

Question 14

You can shop for life insurance on the Internet.

Accepted Answer

A) True 
 B)False

Question 15

The basic information about who is covered,the time period of coverage and the policy limits are contained in the insuring agreements section of a life insurance policy.

Accepted Answer

A) True 
 B)False

Question 16

The principal borrowed from a cash-value life insurance policy can remain outstanding until the insured dies.

Accepted Answer

A) True 
 B)False

Question 17

Viatical companies specialize in buying cash-value life insurance policies from terminally ill persons so that they can receive funds prior to their death.

Accepted Answer

A) True 
 B)False

Question 18

Life insurance needs typically increase while assets decrease over the course of one's life.

Accepted Answer

A) True 
 B)False

Question 19

Whenever the cause of death for an insured person is suicide the company will simply refund the collected premium.

Accepted Answer

A) True 
 B)False

Question 20

If losses from a premature death exceed resources available,life insurance is probably needed.

Accepted Answer

A) True 
 B)False

The interest-adjusted cost index method provides an accurate means of comparing among greatly different types of policies.

____ should be considered when evaluating income-replacement needs.

Surviving spouses under age 60 may only collect Social Security survivor's benefits if there are also surviving children under age 18.

A survivorship joint life policy pays when the last person covered dies.

The rate of return on cash-value life insurance has historically been well ahead of what can be achieved by a diversified portfolio of stock and bond mutual funds.

If Brent is concerned about not being able to pay his life insurance premium should he become disabled,he should consider a policy with

The face value of an insurance policy is never received by the beneficiary when the interest income settlement option is chosen.

What is the maximum amount William could borrow from this policy if it has been in force ten years?

____ life insurance policies possess the greatest investment risk to the policyholder.

Cash dividends on life insurance policies are considered taxable as income by the IRS.

A fundamental decision to make when buying life insurance is whether to purchase term insurance or cash-value insurance.

A substantial benefit for working families with young children should a parent die are

You can shop for life insurance on the Internet.

The basic information about who is covered,the time period of coverage and the policy limits are contained in the insuring agreements section of a life insurance policy.

The principal borrowed from a cash-value life insurance policy can remain outstanding until the insured dies.

Viatical companies specialize in buying cash-value life insurance policies from terminally ill persons so that they can receive funds prior to their death.

Life insurance needs typically increase while assets decrease over the course of one's life.

Whenever the cause of death for an insured person is suicide the company will simply refund the collected premium.

If losses from a premature death exceed resources available,life insurance is probably needed.

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 interest-adjusted cost index method provides an accurate means of comparing among greatly different types of policies.

____ should be considered when evaluating income-replacement needs.

Surviving spouses under age 60 may only collect Social Security survivor's benefits if there are also surviving children under age 18.

A survivorship joint life policy pays when the last person covered dies.

The rate of return on cash-value life insurance has historically been well ahead of what can be achieved by a diversified portfolio of stock and bond mutual funds.

If Brent is concerned about not being able to pay his life insurance premium should he become disabled,he should consider a policy with

The face value of an insurance policy is never received by the beneficiary when the interest income settlement option is chosen.

​ What is the maximum amount William could borrow from this policy if it has been in force ten years?

____ life insurance policies possess the greatest investment risk to the policyholder.

Cash dividends on life insurance policies are considered taxable as income by the IRS.

A fundamental decision to make when buying life insurance is whether to purchase term insurance or cash-value insurance.

A substantial benefit for working families with young children should a parent die are

You can shop for life insurance on the Internet.

The basic information about who is covered,the time period of coverage and the policy limits are contained in the insuring agreements section of a life insurance policy.

The principal borrowed from a cash-value life insurance policy can remain outstanding until the insured dies.

Viatical companies specialize in buying cash-value life insurance policies from terminally ill persons so that they can receive funds prior to their death.

Life insurance needs typically increase while assets decrease over the course of one's life.

Whenever the cause of death for an insured person is suicide the company will simply refund the collected premium.

If losses from a premature death exceed resources available,life insurance is probably needed.

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

What is the maximum amount William could borrow from this policy if it has been in force ten years?