Question 1

The easy method of determining life insurance is based on the rule of thumb that a "typical family" will need about 70 percent of a wage-earner's salary for seven years.

Accepted Answer

A) True 
 B)False

Question 2

Two-earner couples may have a moderate need for life insurance, especially if they have a mortgage or other large debts.

Accepted Answer

A) True 
 B)False

Question 3

Life insurance is one of the most important purchases you may ever make.

Accepted Answer

A) True 
 B)False

Question 4

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65. His policy is then 'paid up' for life. His beneficiaries will receive the face value upon his death. What type of life insurance does Tim likely have?

Accepted Answer

A)  Ordinary whole life 
B)  Limited payment life 
C)  Variable life 
D)  Adjustable life 
E)  Universal life 
A)  Ordinary whole life 
B)  Limited payment life 
C)  Variable life 
D)  Adjustable life 
E)  Universal life

Question 5

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Accepted Answer

A) True 
 B)False

Question 6

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

Accepted Answer

In determining your life insurance needs

Question 7

If you have convertible term insurance, you can exchange it for a whole life policy without a medical examination and at a higher premium.

Accepted Answer

A) True 
 B)False

Question 8

Scott Cumbie believes he has a 'typical' family and wants to determine his life insurance need. What method would probably be the fastest method for him to use to calculate his insurance need?

Accepted Answer

A)  Easy method 
B)  DINK method 
C)  Nonworking spouse method 
D)  'Family need' method 
E)  Sample method 
A)  Easy method 
B)  DINK method 
C)  Nonworking spouse method 
D)  'Family need' method 
E)  Sample method

Question 9

The DINK (Duel Income No Kids) method of determining life insurance needs assumes that the spouse will continue to work after husband's/wife's death.

Accepted Answer

A) True 
 B)False

Question 10

If your death would cause financial stress for your dependents, you should consider purchasing life insurance.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following questions are important to consider when choosing an insurance agent?

Accepted Answer

A)  Is your agent available when needed? 
B)  Does your agent advise you to have a financial plan? 
C)  Is your agent happy to answer questions? 
D)  Does your agent keep up with changes in the insurance field? 
E)  You should be asking all of these questions. 
A)  Is your agent available when needed? 
B)  Does your agent advise you to have a financial plan? 
C)  Is your agent happy to answer questions? 
D)  Does your agent keep up with changes in the insurance field? 
E)  You should be asking all of these questions.

Question 12

Which of the following statements is true about group life insurance?

Accepted Answer

A)  Group life has been losing its popularity recently. 
B)  The cost of insurance per $1,000 is the same for each employee. 
C)  Group insurance is not a good bargain for older employees. 
D)  Principles that apply to other forms of insurance do not apply to group life insurance. 
E)  Group life is basically the same thing as term life insurance. 
A)  Group life has been losing its popularity recently. 
B)  The cost of insurance per $1,000 is the same for each employee. 
C)  Group insurance is not a good bargain for older employees. 
D)  Principles that apply to other forms of insurance do not apply to group life insurance. 
E)  Group life is basically the same thing as term life insurance.

Question 13

The life expectancy of a female at the age of 30 is 47.65 years. It means that:

Accepted Answer

A)  a 30-year-old female has the highest probability of dying. 
B)  a 30-year-old female has the highest probability of living. 
C)  females alive at 30 years of age have an average number of 47.65 years still left to live. 
D)  47.65 is the average age at which all females, age 30, will die. 
E)  very few 30-year-old females will live past the age of 77. 
A)  a 30-year-old female has the highest probability of dying. 
B)  a 30-year-old female has the highest probability of living. 
C)  females alive at 30 years of age have an average number of 47.65 years still left to live. 
D)  47.65 is the average age at which all females, age 30, will die. 
E)  very few 30-year-old females will live past the age of 77.

Question 14

Most participating policies are sold by:

Accepted Answer

A)  federal government agencies. 
B)  state insurance commissioners. 
C)  mutual life insurance companies. 
D)  stock life insurance companies. 
E)  investment banks. 
A)  federal government agencies. 
B)  state insurance commissioners. 
C)  mutual life insurance companies. 
D)  stock life insurance companies. 
E)  investment banks.

Question 15

Life insurance premiums are determined basically by the:

Accepted Answer

A)  forces of supply and demand. 
B)  insurance division of the federal government. 
C)  forces of competition. 
D)  use of mortality tables. 
E)  guesswork of insurance executives. 
A)  forces of supply and demand. 
B)  insurance division of the federal government. 
C)  forces of competition. 
D)  use of mortality tables. 
E)  guesswork of insurance executives.

Question 16

Most American families face substantial loss when one spouse dies unexpectedly.

Accepted Answer

A) True 
 B)False

Question 17

A beneficiary is a person who:

Accepted Answer

A)  acts as a trustee of your insurance policy. 
B)  is a guardian of your children. 
C)  acts on your behalf. 
D)  is designated to receive life insurance proceeds. 
E)  acts as an agent handling your insurance policy. 
A)  acts as a trustee of your insurance policy. 
B)  is a guardian of your children. 
C)  acts on your behalf. 
D)  is designated to receive life insurance proceeds. 
E)  acts as an agent handling your insurance policy.

Question 18

What are the two types of life insurance companies? Explain the basic features of each type.

Accepted Answer

There are two types of life insurance co

Question 19

In a participating policy, a part of the premium is refunded to the policyholder annually.

Accepted Answer

A) True 
 B)False

Question 20

Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

Accepted Answer

A)  $50,000 
B)  $70,000 
C)  $90,000 
D)  $110,000 
E)  $140,000 
A)  $50,000 
B)  $70,000 
C)  $90,000 
D)  $110,000 
E)  $140,000

The easy method of determining life insurance is based on the rule of thumb that a "typical family" will need about 70 percent of a wage-earner's salary for seven years.

Two-earner couples may have a moderate need for life insurance, especially if they have a mortgage or other large debts.

Life insurance is one of the most important purchases you may ever make.

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65. His policy is then 'paid up' for life. His beneficiaries will receive the face value upon his death. What type of life insurance does Tim likely have?

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

If you have convertible term insurance, you can exchange it for a whole life policy without a medical examination and at a higher premium.

Scott Cumbie believes he has a 'typical' family and wants to determine his life insurance need. What method would probably be the fastest method for him to use to calculate his insurance need?

The DINK (Duel Income No Kids) method of determining life insurance needs assumes that the spouse will continue to work after husband's/wife's death.

If your death would cause financial stress for your dependents, you should consider purchasing life insurance.

Which of the following questions are important to consider when choosing an insurance agent?

Which of the following statements is true about group life insurance?

The life expectancy of a female at the age of 30 is 47.65 years. It means that:

Most participating policies are sold by:

Life insurance premiums are determined basically by the:

Most American families face substantial loss when one spouse dies unexpectedly.

A beneficiary is a person who:

What are the two types of life insurance companies? Explain the basic features of each type.

In a participating policy, a part of the premium is refunded to the policyholder annually.

Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

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Exam 12: Life Insurance

The easy method of determining life insurance is based on the rule of thumb that a "typical family" will need about 70 percent of a wage-earner's salary for seven years.

Two-earner couples may have a moderate need for life insurance, especially if they have a mortgage or other large debts.

Life insurance is one of the most important purchases you may ever make.

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65. His policy is then 'paid up' for life. His beneficiaries will receive the face value upon his death. What type of life insurance does Tim likely have?

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

If you have convertible term insurance, you can exchange it for a whole life policy without a medical examination and at a higher premium.

Scott Cumbie believes he has a 'typical' family and wants to determine his life insurance need. What method would probably be the fastest method for him to use to calculate his insurance need?

The DINK (Duel Income No Kids) method of determining life insurance needs assumes that the spouse will continue to work after husband's/wife's death.

If your death would cause financial stress for your dependents, you should consider purchasing life insurance.

Which of the following questions are important to consider when choosing an insurance agent?

Which of the following statements is true about group life insurance?

The life expectancy of a female at the age of 30 is 47.65 years. It means that:

Most participating policies are sold by:

Life insurance premiums are determined basically by the:

Most American families face substantial loss when one spouse dies unexpectedly.

A beneficiary is a person who:

What are the two types of life insurance companies? Explain the basic features of each type.

In a participating policy, a part of the premium is refunded to the policyholder annually.

Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

Personal Finance Basics and the Time Value of Money

Financial Aspects of Career Planning

Money Management Strategy: Financial Statements and Budgeting

Planning Your Tax Strategy

Financial Services: Savings Plans and Payment Accounts

Introduction to Consumer Credit

Choosing a Source of Credit: The Costs of Credit Alternatives

Consumer Purchasing Strategies and Legal Protection

The Housing Decision: Factors and Finances

Property and Motor Vehicle Insurance

Health, Disability, and Long-Term Care Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters