Question 1

What do the terms "term","decreasing" or "declining term",and "whole life" mean with respect to life insurance?

Accepted Answer

Term or level term provides a fixed amount of coverage for a specific period of time.Declining term provides coverage that decreases in amount over a specified period of time.Whole life provides a fixed amount of coverage for the life of the insured.In essence it combines declining term with a forced saving feature.Neither level term nor declining term has a savings feature and are thus less expensive than whole life.

Question 2

Usually,there is no time limit on reinstatement of a lapsed life insurance policy.

Accepted Answer

A) True 
 B)False  False

Question 3

The DINK method assumes that:

Accepted Answer

A) you have only two children. 
B) your spouse does not work. 
C) your insurance needs are complex. 
D) your spouse will continue to work after your death. 
E) your spouse is in an occupation with an uncertain futurE. 
A) you have only two children. 
B) your spouse does not work. 
C) your insurance needs are complex. 
D) your spouse will continue to work after your death. 
E) your spouse is in an occupation with an uncertain futurE. D

Question 4

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Accepted Answer

A) True 
 B)False

Question 5

Stock life insurance companies are owned by their policyholders.

Accepted Answer

A) True 
 B)False

Question 6

The first step in buying insurance is to determine whether you really need life insurance.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 9

Which statement is correct regarding stock life insurance companies?

Accepted Answer

A) A stock company sells participating policies. 
B) A stock company always charges higher premiums than mutual companies. 
C) A policyholder participates in the profit or loss of the company. 
D) A stock company generally sells nonparticipating (non par)policies. 
E) A stock company is owned by policyholders. 
A) A stock company sells participating policies. 
B) A stock company always charges higher premiums than mutual companies. 
C) A policyholder participates in the profit or loss of the company. 
D) A stock company generally sells nonparticipating (non par)policies. 
E) A stock company is owned by policyholders.

Question 10

One important feature of a whole life policy is the nonforfeiture clause.

Accepted Answer

A) True 
 B)False

Question 11

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 12

What is an annuity? What is the difference between life insurance and an annuity? Include payment options and tax considerations.

Accepted Answer

An annuity is a financial contract writt

Question 13

An annuity is often described as being:

Accepted Answer

A) the same as a whole life insurance. 
B) term life insurance. 
C) limited life insurance. 
D) disability income insurance. 
E) the opposite of life insurancE. 
A) the same as a whole life insurance. 
B) term life insurance. 
C) limited life insurance. 
D) disability income insurance. 
E) the opposite of life insurancE.

Question 14

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) Consider all the questions in the other answers. 
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) Consider all the questions in the other answers.

Question 15

The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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 18

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 19

Your annual income is $35,000.What is your life insurance need based on the easy method?

Accepted Answer

A) $35,000 
B) $110,500 
C) $171,500 
D) $191,500 
E) over $200,000 
A) $35,000 
B) $110,500 
C) $171,500 
D) $191,500 
E) over $200,000

Question 20

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

What do the terms "term","decreasing" or "declining term",and "whole life" mean with respect to life insurance?

Usually,there is no time limit on reinstatement of a lapsed life insurance policy.

The DINK method assumes that:

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Stock life insurance companies are owned by their policyholders.

The first step in buying insurance is to determine whether you really need life insurance.

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

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

Which statement is correct regarding stock life insurance companies?

One important feature of a whole life policy is the nonforfeiture clause.

Most participating policies are sold by:

What is an annuity? What is the difference between life insurance and an annuity? Include payment options and tax considerations.

An annuity is often described as being:

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

The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.

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

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

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?

Your annual income is $35,000.What is your life insurance need based on the easy method?

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?

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

What do the terms "term","decreasing" or "declining term",and "whole life" mean with respect to life insurance?

Usually,there is no time limit on reinstatement of a lapsed life insurance policy.

The DINK method assumes that:

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Stock life insurance companies are owned by their policyholders.

The first step in buying insurance is to determine whether you really need life insurance.

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

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

Which statement is correct regarding stock life insurance companies?

One important feature of a whole life policy is the nonforfeiture clause.

Most participating policies are sold by:

What is an annuity? What is the difference between life insurance and an annuity? Include payment options and tax considerations.

An annuity is often described as being:

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

The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.

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

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

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?

Your annual income is $35,000.What is your life insurance need based on the easy method?

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?

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