Question 1

Which of the following statements is correct?

Accepted Answer

A)  It is better to fund a fixed annuity before fully funding your IRA, Keogh, or 401(k). 
B)  The timing for payments of a variable annuity are variable. 
C)  It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). 
D)  A fixed annuity is one where the investments made into the annuity are variable. 
E)  It is better to fund an IRA, Keogh, or 401(k) before buying an annuity. 
A)  It is better to fund a fixed annuity before fully funding your IRA, Keogh, or 401(k). 
B)  The timing for payments of a variable annuity are variable. 
C)  It is better to fund a variable annuity before fully funding your IRA, Keogh, or 401(k). 
D)  A fixed annuity is one where the investments made into the annuity are variable. 
E)  It is better to fund an IRA, Keogh, or 401(k) before buying an annuity.

Question 2

A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage.Which of the following riders should he consider?

Accepted Answer

A)  Waiver of premium disability benefit 
B)  Accidental death benefit 
C)  Guaranteed insurability option 
D)  Cost-of-living protection 
E)  Accelerated benefits 
A)  Waiver of premium disability benefit 
B)  Accidental death benefit 
C)  Guaranteed insurability option 
D)  Cost-of-living protection 
E)  Accelerated benefits

Question 3

Which of the following is NOT a type of permanent insurance?

Accepted Answer

A)  Whole life 
B)  Straight life 
C)  Ordinary life 
D)  Term life 
E)  Cash value life 
A)  Whole life 
B)  Straight life 
C)  Ordinary life 
D)  Term life 
E)  Cash value life

Question 4

About ___ of the U.S.life insurance companies are stock companies.

Accepted Answer

A)  5% 
B)  25% 
C)  50% 
D)  75% 
E)  95% 
A)  5% 
B)  25% 
C)  50% 
D)  75% 
E)  95%

Question 5

After you purchase a life insurance contract,you have a "free look" period that lasts

Accepted Answer

A)  3 days. 
B)  5 days. 
C)  10 days. 
D)  30 days. 
E)  60 days. 
A)  3 days. 
B)  5 days. 
C)  10 days. 
D)  30 days. 
E)  60 days.

Question 6

Donald and Charlene are married and do not have any children.Each plans to continue to work after the other one dies.Which method are they using to determine their life insurance needs?

Accepted Answer

A)  Easy method 
B)  Dual income, no kids method 
C)  Formal calculation method 
D)  Nonworking spouse method 
E)  Family needs method 
A)  Easy method 
B)  Dual income, no kids method 
C)  Formal calculation method 
D)  Nonworking spouse method 
E)  Family needs method

Question 7

Don and Diane are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family,which includes two children,ages 5 and 9.They have determined that their annual income is $65,000 and their net worth is now $150,000.Using both the easy method and the "nonworking" spouse method,calculate the amount of life insurance they should carry.Remember that they want to be certain that they have enough coverage,so

Accepted Answer

The easy method uses this calculation: C

Question 8

The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called

Accepted Answer

A)  Lump-sum payment. 
B)  Limited installment payment. 
C)  Final life payment. 
D)  Life income option. 
E)  Proceeds left with the company. 
A)  Lump-sum payment. 
B)  Limited installment payment. 
C)  Final life payment. 
D)  Life income option. 
E)  Proceeds left with the company.

Question 9

Todd plans to purchase a life insurance policy from a stock life insurance company.What kind of policy is he planning to purchase?

Accepted Answer

A)  Dividend policy 
B)  Nonparticipating policy 
C)  Mutual policy 
D)  Participating policy 
E)  Stock policy 
A)  Dividend policy 
B)  Nonparticipating policy 
C)  Mutual policy 
D)  Participating policy 
E)  Stock policy

Question 10

What are two things you should consider before buying life insurance?

Accepted Answer

All of the following are acceptable:
1.F

Question 11

What is a group life insurance policy and who can benefit from it?

Accepted Answer

A group life insurance policy is a varia

Question 12

This term life policy will guarantee that you will pay the same premium for the duration of your policy.

Accepted Answer

A)  Renewable term 
B)  Multiyear level term 
C)  Decreasing term 
D)  Limited payment 
E)  Single year term 
A)  Renewable term 
B)  Multiyear level term 
C)  Decreasing term 
D)  Limited payment 
E)  Single year term

Question 13

Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams.Which of the following riders should she consider?

Accepted Answer

A)  Waiver of premium disability benefit 
B)  Accidental death benefit 
C)  Guaranteed insurability option 
D)  Cost-of-living protection 
E)  Accelerated benefits 
A)  Waiver of premium disability benefit 
B)  Accidental death benefit 
C)  Guaranteed insurability option 
D)  Cost-of-living protection 
E)  Accelerated benefits

Question 14

Decreasing term pays less to the beneficiary as time passes.

Accepted Answer

A) True 
 B)False

Question 15

The "nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets.

Accepted Answer

A) True 
 B)False

Question 16

Annuities are often purchased for

Accepted Answer

A)  401(k) plans. 
B)  Certificates of deposit. 
C)  Individual retirement accounts (IRAs). 
D)  Term life insurance plans. 
E)  Whole life insurance plans. 
A)  401(k) plans. 
B)  Certificates of deposit. 
C)  Individual retirement accounts (IRAs). 
D)  Term life insurance plans. 
E)  Whole life insurance plans.

Question 17

Fred bought life insurance five years ago.He forgot to tell them that he had a heart condition,and,as a result of that condition,he recently died.Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation?

Accepted Answer

A)  Incontestability clause 
B)  Misstatement of age provision 
C)  Naming a beneficiary 
D)  Policy reinstatement 
E)  The grace period 
A)  Incontestability clause 
B)  Misstatement of age provision 
C)  Naming a beneficiary 
D)  Policy reinstatement 
E)  The grace period

Question 18

Wendy has had a life insurance policy for five years.She was recently divorced.Which of the following provisions should she take action on?

Accepted Answer

A)  Incontestability clause 
B)  Misstatement of age provision 
C)  Naming a beneficiary 
D)  Policy reinstatement 
E)  The grace period 
A)  Incontestability clause 
B)  Misstatement of age provision 
C)  Naming a beneficiary 
D)  Policy reinstatement 
E)  The grace period

Question 19

Pam just started working at XYZ Widget Company and finally wants to get insurance coverage.She does not want to take a medical exam to get coverage because she has some underlying health conditions and is concerned that she might not qualify for a policy.Which of the following life insurance policies should she apply for?

Accepted Answer

A)  Adjustable life 
B)  Group life 
C)  Limited life 
D)  Universal life 
E)  Variable life 
A)  Adjustable life 
B)  Group life 
C)  Limited life 
D)  Universal life 
E)  Variable life

Question 20

If you have a multiyear level term policy,

Accepted Answer

A)  You can convert your policy to a permanent type at the end of the term. 
B)  You policy will continue for one year. 
C)  Your premium will be the same for the duration of your policy. 
D)  Your premium will not increase when you renew it. 
E)  None of these is correct. 
A)  You can convert your policy to a permanent type at the end of the term. 
B)  You policy will continue for one year. 
C)  Your premium will be the same for the duration of your policy. 
D)  Your premium will not increase when you renew it. 
E)  None of these is correct.

Which of the following statements is correct?

A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage.Which of the following riders should he consider?

Which of the following is NOT a type of permanent insurance?

About ___ of the U.S.life insurance companies are stock companies.

After you purchase a life insurance contract,you have a "free look" period that lasts

Donald and Charlene are married and do not have any children.Each plans to continue to work after the other one dies.Which method are they using to determine their life insurance needs?

The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called

Todd plans to purchase a life insurance policy from a stock life insurance company.What kind of policy is he planning to purchase?

What are two things you should consider before buying life insurance?

What is a group life insurance policy and who can benefit from it?

This term life policy will guarantee that you will pay the same premium for the duration of your policy.

Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams.Which of the following riders should she consider?

Decreasing term pays less to the beneficiary as time passes.

The "nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets.

Annuities are often purchased for

Fred bought life insurance five years ago.He forgot to tell them that he had a heart condition,and,as a result of that condition,he recently died.Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation?

Wendy has had a life insurance policy for five years.She was recently divorced.Which of the following provisions should she take action on?

If you have a multiyear level term policy,

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

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Exam 10: Financial Planning With Life Insurance

Which of the following statements is correct?

A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage.Which of the following riders should he consider?

Which of the following is NOT a type of permanent insurance?

About ___ of the U.S.life insurance companies are stock companies.

After you purchase a life insurance contract,you have a "free look" period that lasts

Donald and Charlene are married and do not have any children.Each plans to continue to work after the other one dies.Which method are they using to determine their life insurance needs?

The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called

Todd plans to purchase a life insurance policy from a stock life insurance company.What kind of policy is he planning to purchase?

What are two things you should consider before buying life insurance?

What is a group life insurance policy and who can benefit from it?

This term life policy will guarantee that you will pay the same premium for the duration of your policy.

Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams.Which of the following riders should she consider?

Decreasing term pays less to the beneficiary as time passes.

The "nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets.

Annuities are often purchased for

Fred bought life insurance five years ago.He forgot to tell them that he had a heart condition,and,as a result of that condition,he recently died.Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation?

Wendy has had a life insurance policy for five years.She was recently divorced.Which of the following provisions should she take action on?

If you have a multiyear level term policy,

Personal Financial Planning in Action

Money Management Skills

Taxes in Your Financial Plan

Financial Services: Savings Plans and Payment Account

Consumer Credit: Advantages, Dis-Advantages, Sources, and Costs

Consumer Purchasing Strategies and Wise Buying of Motor Vehicles

Selecting and Financing Housing

Home and Automobile Insurance

Health and Disability Income Insurance

Investing Basics and Evaluating Bonds

Investing in Stocks

Investing in Mutual Funds

Starting Early: Retirement and Estate Planning

Filters