Question 1

Households with small children usually have the greatest need for life insurance.

Accepted Answer

A) True 
 B)False

Question 2

Term insurance is protection for a specified period of time,usually:

Accepted Answer

A) 1 year 
B) 5 years 
C) 10 years 
D) 20 years 
E) Any of these intervals are offered 
A) 1 year 
B) 5 years 
C) 10 years 
D) 20 years 
E) Any of these intervals are offered

Question 3

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 4

Jeff Willis has five kids and more debt than the average family.What method would probably be the best method for him to use to calculate his insurance needs?

Accepted Answer

A) Easy method 
B) DINK method 
C) Nonworking spouse method 
D) Family need method 
E) Soccer mom method 
A) Easy method 
B) DINK method 
C) Nonworking spouse method 
D) Family need method 
E) Soccer mom method

Question 5

How much insurance one should carry is an important question for anyone who owns or intends to buy life insurance.

Accepted Answer

A) True 
 B)False

Question 6

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John 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 7

If your insurance agent does not give you an interest-adjusted index upon request,then your best bet is to:

Accepted Answer

A) buy the policy anyway. 
B) look for another agent. 
C) tell the agent that you are still thinking. 
D) tell the agent you will buy it later. 
E) complain to the Better Business Bureau. 
A) buy the policy anyway. 
B) look for another agent. 
C) tell the agent that you are still thinking. 
D) tell the agent you will buy it later. 
E) complain to the Better Business Bureau.

Question 8

Which is a correct statement about life insurance?

Accepted Answer

A) Life insurance provides liquidity at the time of death. 
B) Life insurance is still more often bought than sold. 
C) Life insurance is one of the least expensive purchases you may ever make. 
D) Choosing the right policy takes only a few minutes. 
E) Consumer awareness of life insurance has changed considerably over the years. 
A) Life insurance provides liquidity at the time of death. 
B) Life insurance is still more often bought than sold. 
C) Life insurance is one of the least expensive purchases you may ever make. 
D) Choosing the right policy takes only a few minutes. 
E) Consumer awareness of life insurance has changed considerably over the years.

Question 9

What percent of all applicants who apply for life insurance are found to be insurable?

Accepted Answer

A) 58 
B) 68 
C) 78 
D) 88 
E) 98 
A) 58 
B) 68 
C) 78 
D) 88 
E) 98

Question 10

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

Accepted Answer

A) Stock 
B) Debt 
C) Mutual 
D) Exclusionary 
E) Cooperative 
A) Stock 
B) Debt 
C) Mutual 
D) Exclusionary 
E) Cooperative

Question 11

Lisa Smith has her age listed on her driver's license as being three years younger than it actually is.This is also how old she tells her insurance company she is.Her insurance company has discovered she lied about her age.What provision of her life insurance contract states that her benefits will be what her premium would have bought if she had been truthful about her age?

Accepted Answer

A) Policy loan 
B) Misstatement of age 
C) Cost-of-living protection 
D) Guaranteed insurability 
E) Grace period 
A) Policy loan 
B) Misstatement of age 
C) Cost-of-living protection 
D) Guaranteed insurability 
E) Grace period

Question 12

Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Accepted Answer

A) Straight 
B) Renewable 
C) Convertible 
D) Decreasing 
E) Accelerated 
A) Straight 
B) Renewable 
C) Convertible 
D) Decreasing 
E) Accelerated

Question 13

Individuals and families purchase life insurance primarily to:

Accepted Answer

A) pay liability claims resulting from accidents. 
B) protect someone who depends on them from financial losses caused by their death. 
C) fund lavish retirement vacations. 
D) keep up with people with a similar financial situation. 
E) make early retirement possible. 
A) pay liability claims resulting from accidents. 
B) protect someone who depends on them from financial losses caused by their death. 
C) fund lavish retirement vacations. 
D) keep up with people with a similar financial situation. 
E) make early retirement possible.

Question 14

Term life insurance premiums decrease as you get older.

Accepted Answer

A) True 
 B)False

Question 15

Two basic types of life insurance are temporary and permanent insurance.

Accepted Answer

A) True 
 B)False

Question 16

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 17

The lump-sum payment settlement option is the least used option.

Accepted Answer

A) True 
 B)False

Question 18

Cash-value policies may make sense for people who:

Accepted Answer

A) intend to keep the policies for only a couple of years. 
B) are able to save easily. 
C) must be forced to save. 
D) need to accumulate reserves in the early years. 
E) need benefits in the early years. 
A) intend to keep the policies for only a couple of years. 
B) are able to save easily. 
C) must be forced to save. 
D) need to accumulate reserves in the early years. 
E) need benefits in the early years.

Question 19

The total debts of you and your spouse include the following: mortgage,$180,000; auto loan,$10,000; credit card balance,$2,000; and personal debts of $6,000.Further,you estimate that your funeral will cost $4,000.Your spouse expects to continue to work after your death.What is your life insurance need using the DINK method?

Accepted Answer

A) $103,000 
B) $106,000 
C) $226,000 
D) $202,000 
E) $99,000 
A) $103,000 
B) $106,000 
C) $226,000 
D) $202,000 
E) $99,000

Question 20

Many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.

Accepted Answer

A) True 
 B)False

Households with small children usually have the greatest need for life insurance.

Term insurance is protection for a specified period of time,usually:

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

Jeff Willis has five kids and more debt than the average family.What method would probably be the best method for him to use to calculate his insurance needs?

How much insurance one should carry is an important question for anyone who owns or intends to buy life insurance.

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John likely have?

If your insurance agent does not give you an interest-adjusted index upon request,then your best bet is to:

Which is a correct statement about life insurance?

What percent of all applicants who apply for life insurance are found to be insurable?

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Individuals and families purchase life insurance primarily to:

Term life insurance premiums decrease as you get older.

Two basic types of life insurance are temporary and permanent insurance.

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

The lump-sum payment settlement option is the least used option.

Cash-value policies may make sense for people who:

Many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.

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 Stock

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

Households with small children usually have the greatest need for life insurance.

Term insurance is protection for a specified period of time,usually:

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

Jeff Willis has five kids and more debt than the average family.What method would probably be the best method for him to use to calculate his insurance needs?

How much insurance one should carry is an important question for anyone who owns or intends to buy life insurance.

John Camey has a life insurance policy that is tied to a separate stock fund.The cash value of his insurance policy depends on the yields earned in this fund and is not guaranteed.What type of life insurance does John likely have?

If your insurance agent does not give you an interest-adjusted index upon request,then your best bet is to:

Which is a correct statement about life insurance?

What percent of all applicants who apply for life insurance are found to be insurable?

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Individuals and families purchase life insurance primarily to:

Term life insurance premiums decrease as you get older.

Two basic types of life insurance are temporary and permanent insurance.

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

The lump-sum payment settlement option is the least used option.

Cash-value policies may make sense for people who:

Many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.

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 Stock

Investing in Bonds

Investing in Mutual Funds

Investing in Real Estate and Other Investment Alternatives

Starting Early: Retirement Planning

Estate Planning

Filters