Question 1

The cash values of a variable life insurance policy increase at a constant rate over time.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) cash value accumulation 
B) you can take a loan against the policy 
C) takes advantage of current interest rates 
D) low outlay 
E) generally fixed premium amount 
A) cash value accumulation 
B) you can take a loan against the policy 
C) takes advantage of current interest rates 
D) low outlay 
E) generally fixed premium amount

Question 3

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 4

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the big rating agencies.

Accepted Answer

A) True 
 B)False

Question 5

After you buy new life insurance you have a "free look" period of ______ days.

Accepted Answer

A) 10 
B) 20 
C) 30 
D) 40 
E) 50 
A) 10 
B) 20 
C) 30 
D) 40 
E) 50

Question 6

Catherine Carey has made the choice to stay home and raise her three kids while her husband works.She wants to determine her insurance need.What method was specifically designed for someone in her situation?

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 7

Most life insurance companies are mutuals.

Accepted Answer

A) True 
 B)False

Question 8

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Accepted Answer

A) True 
 B)False

Question 9

Nearly all mutual companies issue only nonparticipating policies.

Accepted Answer

A) True 
 B)False

Question 10

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Accepted Answer

A) True 
 B)False

Question 11

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Accepted Answer

A) True 
 B)False

Question 12

Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount,subject to certain minimums.What type of insurance does Russell 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 13

Life insurance proceeds may be used to provide an education or income for children.

Accepted Answer

A) True 
 B)False

Question 14

A fixed annuity is a plan under which the monthly payments vary.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is (are)false?

Accepted Answer

A) Stock companies generally sell nonparticipating policies. 
B) A participating policy usually has a somewhat higher premium than a comparable nonparticipating policy. 
C) Mutual companies generally sell participating policies. 
D) You can expect to receive a policy dividend from a stock company. 
E) More than one of the other answers is falsE. 
A) Stock companies generally sell nonparticipating policies. 
B) A participating policy usually has a somewhat higher premium than a comparable nonparticipating policy. 
C) Mutual companies generally sell participating policies. 
D) You can expect to receive a policy dividend from a stock company. 
E) More than one of the other answers is falsE.

Question 16

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 17

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

Accepted Answer

A) True 
 B)False

Question 18

A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

The cash values of a variable life insurance policy increase at a constant rate over time.

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

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

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the big rating agencies.

After you buy new life insurance you have a "free look" period of ______ days.

Catherine Carey has made the choice to stay home and raise her three kids while her husband works.She wants to determine her insurance need.What method was specifically designed for someone in her situation?

Most life insurance companies are mutuals.

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Nearly all mutual companies issue only nonparticipating policies.

An annuity is a financial contract written by an insurance company to provide you with a regular income.

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount,subject to certain minimums.What type of insurance does Russell likely have?

Life insurance proceeds may be used to provide an education or income for children.

A fixed annuity is a plan under which the monthly payments vary.

Which of the following is (are)false?

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.

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?

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

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 cash values of a variable life insurance policy increase at a constant rate over time.

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

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

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the big rating agencies.

After you buy new life insurance you have a "free look" period of ______ days.

Catherine Carey has made the choice to stay home and raise her three kids while her husband works.She wants to determine her insurance need.What method was specifically designed for someone in her situation?

Most life insurance companies are mutuals.

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Nearly all mutual companies issue only nonparticipating policies.

An annuity is a financial contract written by an insurance company to provide you with a regular income.

A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount,subject to certain minimums.What type of insurance does Russell likely have?

Life insurance proceeds may be used to provide an education or income for children.

A fixed annuity is a plan under which the monthly payments vary.

Which of the following is (are)false?

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.

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?

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

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