Question 1

Guaranteed renewable term insurance allows you to renew a policy for another term without qualifying medically.

Accepted Answer

A) True 
 B)False  True

Question 2

A(n)_____ is a common provision in many term policies.

Accepted Answer

A) reward clause 
B) renewable clause 
C) loss prevention clause 
D) limited risk clause 
E) arbitration clause 
A) reward clause 
B) renewable clause 
C) loss prevention clause 
D) limited risk clause 
E) arbitration clause B

Question 3

Underwriters can predict whether or not you will suffer a loss this year.

Accepted Answer

A) True 
 B)False  False

Question 4

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

Accepted Answer

A) True 
 B)False

Question 5

The life insurance needs of beneficiaries are secondary since most proceeds are paid to policyholders.

Accepted Answer

A) True 
 B)False

Question 6

The death benefit of a(n)_____ life insurance policy may go down because of poor investment returns.

Accepted Answer

A) limited payment 
B) whole 
C) variable 
D) group 
E) industrial 
A) limited payment 
B) whole 
C) variable 
D) group 
E) industrial

Question 7

Social Security survivor's benefits are intended to provide basic,minimum support to families faced with the loss of the principal wage earner.

Accepted Answer

A) True 
 B)False

Question 8

Group life insurance is most likely to be for ___________. ​

Accepted Answer

A) variable life 
B) special purpose 
C) whole life 
D) a term 
A) variable life 
B) special purpose 
C) whole life 
D) a term

Question 9

It is advisable to purchase life insurance from an insurance company that has been in business for at least _____ years.

Accepted Answer

A) 5 
B) 10 
C) 19 
D) 15 
E) 25 
A) 5 
B) 10 
C) 19 
D) 15 
E) 25

Question 10

Risk avoidance involves asking an insurance company to take over the risk for a small payment (the premium).

Accepted Answer

A) True 
 B)False

Question 11

Families faced with the loss of a principal wage earner receive Social Security benefits _____.

Accepted Answer

A) that are deducted from the insurance proceeds,for the purpose of tax calculation 
B) after paying additional taxes on the benefit amount 
C) from the government that are intended to provide basic,minimum support 
D) that amount to 5 to 10 times the current income of the principal wage earner 
E) after the repayment of all the financial obligations of the principal wage earner 
A) that are deducted from the insurance proceeds,for the purpose of tax calculation 
B) after paying additional taxes on the benefit amount 
C) from the government that are intended to provide basic,minimum support 
D) that amount to 5 to 10 times the current income of the principal wage earner 
E) after the repayment of all the financial obligations of the principal wage earner

Question 12

The most accurate way to determine how much life insurance you need is to use the ___________ method. ​

Accepted Answer

A) multiple-of-earnings 
B) needs analysis 
C) disposable income 
D) DuPont analysis 
A) multiple-of-earnings 
B) needs analysis 
C) disposable income 
D) DuPont analysis

Question 13

Only one agent should be consulted for discussing personal financial needs and insurance requirements while buying life insurance.

Accepted Answer

A) True 
 B)False

Question 14

A grace period permits a policyholder to retain full death protection even though the premium has not been paid for:

Accepted Answer

A) 12 months. 
B) 6 months. 
C) 3 months. 
D) 50 days. 
E) 31 days. 
A) 12 months. 
B) 6 months. 
C) 3 months. 
D) 50 days. 
E) 31 days.

Question 15

Which of the following leads to the payment of a higher insurance premium by the potential insured?

Accepted Answer

A) Job promotion of the potential insured 
B) High-paying career of the potential insured 
C) Obesity of the potential insured 
D) Childbirth in the family of the potential insured 
E) Wedding of the potential insured 
A) Job promotion of the potential insured 
B) High-paying career of the potential insured 
C) Obesity of the potential insured 
D) Childbirth in the family of the potential insured 
E) Wedding of the potential insured

Question 16

Universal life insurance is:

Accepted Answer

A) a deferred premium payment policy. 
B) primarily sold to college students. 
C) a combined investment plan and insurance policy. 
D) a provision for a secondary beneficiary. 
E) less expensive than other policy types. 
A) a deferred premium payment policy. 
B) primarily sold to college students. 
C) a combined investment plan and insurance policy. 
D) a provision for a secondary beneficiary. 
E) less expensive than other policy types.

Question 17

Which of the following is true of the multiple-of-earnings method?

Accepted Answer

A) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the net annual earnings of the insured by some selected number. 
B) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the gross annual earnings of the insured by some selected number. 
C) The multiple-of-earnings method considers the insured's financial obligations to compute the insurance premium amount. 
D) The multiple-of-earnings method divides the gross annual earnings of the insured by the insurance coverage available to the insured to determine the amount of annual insurance premium. 
E) The multiple-of-earnings method determines the amount of tax benefits available to the insured when the life insurance coverage is availed. 
A) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the net annual earnings of the insured by some selected number. 
B) The multiple-of-earnings method determines the amount of life insurance coverage needed by multiplying the gross annual earnings of the insured by some selected number. 
C) The multiple-of-earnings method considers the insured's financial obligations to compute the insurance premium amount. 
D) The multiple-of-earnings method divides the gross annual earnings of the insured by the insurance coverage available to the insured to determine the amount of annual insurance premium. 
E) The multiple-of-earnings method determines the amount of tax benefits available to the insured when the life insurance coverage is availed.

Question 18

You can learn about the financial strength of an insurance company by checking ___________ rating system. ​

Accepted Answer

A) the insurance agent's 
B) the U.S.Securities and Exchange Commission's 
C) Standard & Poor's 
D) the Federal Bureau of Investigation's 
A) the insurance agent's 
B) the U.S.Securities and Exchange Commission's 
C) Standard & Poor's 
D) the Federal Bureau of Investigation's

Question 19

The primary purpose of a life insurance plan is to help:

Accepted Answer

A) provide tax benefit to the beneficiaries of the policy in the event of the insured's untimely death. 
B) in the protection of the dependents of the insured from financial loss in the event of his or her untimely death. 
C) in the loss prevention of the insured in the event of his or her untimely death. 
D) in controlling the loss of the insured in the event of his or her untimely death. 
E) in the risk avoidance of the insured in the event of his or her untimely death. 
A) provide tax benefit to the beneficiaries of the policy in the event of the insured's untimely death. 
B) in the protection of the dependents of the insured from financial loss in the event of his or her untimely death. 
C) in the loss prevention of the insured in the event of his or her untimely death. 
D) in controlling the loss of the insured in the event of his or her untimely death. 
E) in the risk avoidance of the insured in the event of his or her untimely death.

Question 20

Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,is the primary beneficiary,and their children,Mimi (age 24)and Ann (age 30),are the contingent beneficiaries.All three survive Marilyn.How will the policy proceeds be distributed?

Accepted Answer

A) $200,000 to Jack 
B) $100,000 each to Mimi and Ann 
C) $100,000 to Jack and $50,000 each to Mimi and Ann 
D) $66,666 each to Jack,Mimi,and Ann 
E) $150,000 to Jack and $25,000 each to Mimi and Ann 
A) $200,000 to Jack 
B) $100,000 each to Mimi and Ann 
C) $100,000 to Jack and $50,000 each to Mimi and Ann 
D) $66,666 each to Jack,Mimi,and Ann 
E) $150,000 to Jack and $25,000 each to Mimi and Ann

Guaranteed renewable term insurance allows you to renew a policy for another term without qualifying medically.

A(n)_____ is a common provision in many term policies.

Underwriters can predict whether or not you will suffer a loss this year.

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

The life insurance needs of beneficiaries are secondary since most proceeds are paid to policyholders.

The death benefit of a(n)_____ life insurance policy may go down because of poor investment returns.

Social Security survivor's benefits are intended to provide basic,minimum support to families faced with the loss of the principal wage earner.

Group life insurance is most likely to be for ___________.

It is advisable to purchase life insurance from an insurance company that has been in business for at least _____ years.

Risk avoidance involves asking an insurance company to take over the risk for a small payment (the premium).

Families faced with the loss of a principal wage earner receive Social Security benefits _____.

The most accurate way to determine how much life insurance you need is to use the ___________ method.

Only one agent should be consulted for discussing personal financial needs and insurance requirements while buying life insurance.

A grace period permits a policyholder to retain full death protection even though the premium has not been paid for:

Which of the following leads to the payment of a higher insurance premium by the potential insured?

Universal life insurance is:

Which of the following is true of the multiple-of-earnings method?

You can learn about the financial strength of an insurance company by checking ___________ rating system.

The primary purpose of a life insurance plan is to help:

Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,is the primary beneficiary,and their children,Mimi (age 24)and Ann (age 30),are the contingent beneficiaries.All three survive Marilyn.How will the policy proceeds be distributed?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 8: Insuring Your Life

Guaranteed renewable term insurance allows you to renew a policy for another term without qualifying medically.

A(n)_____ is a common provision in many term policies.

Underwriters can predict whether or not you will suffer a loss this year.

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

The life insurance needs of beneficiaries are secondary since most proceeds are paid to policyholders.

The death benefit of a(n)_____ life insurance policy may go down because of poor investment returns.

Social Security survivor's benefits are intended to provide basic,minimum support to families faced with the loss of the principal wage earner.

Group life insurance is most likely to be for ___________. ​

It is advisable to purchase life insurance from an insurance company that has been in business for at least _____ years.

Risk avoidance involves asking an insurance company to take over the risk for a small payment (the premium).

Families faced with the loss of a principal wage earner receive Social Security benefits _____.

The most accurate way to determine how much life insurance you need is to use the ___________ method. ​

Only one agent should be consulted for discussing personal financial needs and insurance requirements while buying life insurance.

A grace period permits a policyholder to retain full death protection even though the premium has not been paid for:

Which of the following leads to the payment of a higher insurance premium by the potential insured?

Universal life insurance is:

Which of the following is true of the multiple-of-earnings method?

You can learn about the financial strength of an insurance company by checking ___________ rating system. ​

The primary purpose of a life insurance plan is to help:

Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,is the primary beneficiary,and their children,Mimi (age 24)and Ann (age 30),are the contingent beneficiaries.All three survive Marilyn.How will the policy proceeds be distributed?

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, ETFS and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Group life insurance is most likely to be for ___________.

The most accurate way to determine how much life insurance you need is to use the ___________ method.

You can learn about the financial strength of an insurance company by checking ___________ rating system.