Exam 12: Life Insurance

Richard Beck has a life insurance policy which he has altered to include an accidental death benefit payable to his son and daughter.This alteration has most likely been done by attaching a ____ to the policy.

Life insurance proceeds may be used to:

Term insurance is protection for a specified period of time,usually 1,5,10,or 20 years.

Which statement is false?

Most people buy life insurance to protect someone who depends on them from financial losses caused by their death.

Explain how a guaranteed insurability option works and why it is beneficial.

The amount of your whole life insurance premium for each $1,000 of coverage depends primarily on the age at which you purchase the insurance.

A settlement option that provides for payment of the life insurance proceeds in equal periodic installments for a specified number of years after your death is called a:

Russell Lowe has a life insurance policy that allows him to change his premium without changing his coverage.He can also access his cash value with a policy loan or a withdrawal.What type of insurance does Russell likely have?

Industrial life insurance is the most popular form of insurance today.

When comparing Universal Life policies with Whole Life policies,which of the following is typically an advantage of a Universal Life policy?

Term insurance is a basic,"no frills" form of life insurance and is the best value for most consumers.

Frank Keating has a life insurance policy that can be exchanged for a whole life policy without a medical examination.Once it has been exchanged,the premiums will increase.What type of term life insurance does Frank likely have?

Suppose your annual premium for a $30,000,20-year limited-payment policy is $675 over the 20-year period.The cash value of your policy at the end of the 20 years is $10,500.Assume that you could have invested the annual premium in a mutual fund yielding 7 percent annually.What is the net cost of your insurance for the 20-year period? Use a factor of 40.995 for your time value of money calculation.

Insurance experts have estimated that extra costs of up to ___________ a year may be required to replace the services of a homemaker in a family with small children.

The policy loan provision permits you to borrow any amount up to the cash value of the policy.

Which type of life insurance policy combines term insurance and investment elements?

Which type of insurance is sometimes called temporary life insurance?

When choosing life insurance,you should consider:

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