Question 1

Frank,age 38,was hit by a car and died.Which of the following riders provided an additional benefit for his heirs?

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 2

The lower the interest-adjusted index,the lower the cost of a life insurance policy.

Accepted Answer

A) True 
 B)False

Question 3

What is the difference between a fixed annuity and a variable annuity?

Accepted Answer

The fixed annuity states that the annuit

Question 4

Marianne and Roger are in good health and have reasonably secure careers.Each earns $45,000 annually.They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans.If one should die,they think that funeral expenses would be $12,000.What is their total insurance need using the DINK method?

Accepted Answer

A)  $12,000 
B)  $86,000 
C)  $98,000 
D)  $172,000 
E)  $217,000 
A)  $12,000 
B)  $86,000 
C)  $98,000 
D)  $172,000 
E)  $217,000

Question 5

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

Accepted Answer

A)  Whole life 
B)  Variable life 
C)  Universal life 
D)  Adjustable life 
E)  Decreasing term life 
A)  Whole life 
B)  Variable life 
C)  Universal life 
D)  Adjustable life 
E)  Decreasing term life

Question 6

Another name for a straight term policy is

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 7

Which of the following is NOT a factor that affects the price a company charges for a life insurance policy?

Accepted Answer

A)  The company's cost of doing business. 
B)  The return on its investments. 
C)  The mortality rate it expects among its policy holders. 
D)  The policy features. 
E)  All of these affect the price. 
A)  The company's cost of doing business. 
B)  The return on its investments. 
C)  The mortality rate it expects among its policy holders. 
D)  The policy features. 
E)  All of these affect the price.

Question 8

All individuals need life insurance.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a poor choice for the amount of protection offered for an individual?

Accepted Answer

A)  Group life 
B)  Term 
C)  Credit life 
D)  Endowment life 
E)  Adjustable life 
A)  Group life 
B)  Term 
C)  Credit life 
D)  Endowment life 
E)  Adjustable life

Question 10

The most widely used settlement option for a life insurance program is the lump-sum payment.

Accepted Answer

A) True 
 B)False

Question 11

Tim and Tammy 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 4 and 10.They have determined that their annual income is $70,000 and their net worth is now $150,000.What is the amount of life insurance they should carry using the "nonworking" spouse method?

Accepted Answer

A)  $140,000 
B)  $343,000 
C)  $490,000 
D)  $700,000 
E)  $750,000 
A)  $140,000 
B)  $343,000 
C)  $490,000 
D)  $700,000 
E)  $750,000

Question 12

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 the easy method,calculate the amount of life insurance they should carry.

Accepted Answer

The easy method uses

Question 13

Annuities are most beneficial for individuals who expect to live only a short time.

Accepted Answer

A) True 
 B)False

Question 14

Return-of-premium term pays out all premiums plus interest to a beneficiary.

Accepted Answer

A) True 
 B)False

Question 15

Mutual life insurance companies specialize in the sale of nonparticipating policies.

Accepted Answer

A) True 
 B)False

Question 16

Premium payments are fixed with a variable life policy.

Accepted Answer

A) True 
 B)False

Question 17

Amy bought a life insurance policy and named Ben as her beneficiary.She has since died.Who will receive the benefits from her policy?

Accepted Answer

A)  Ben. 
B)  Ben's beneficiaries. 
C)  Her contingent beneficiaries. 
D)  Her parents. 
E)  None of these. 
A)  Ben. 
B)  Ben's beneficiaries. 
C)  Her contingent beneficiaries. 
D)  Her parents. 
E)  None of these.

Question 18

Compare and contrast life insurance and annuities.

Accepted Answer

Comparison:
Both are products offered by

Question 19

Judy and James have a 4-year-old child.They plan to purchase life insurance using this formula: Current income × 7 × 70%.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 20

You want to purchase a life insurance policy that pays a dividend.What kind of policy would you want 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

Frank,age 38,was hit by a car and died.Which of the following riders provided an additional benefit for his heirs?

The lower the interest-adjusted index,the lower the cost of a life insurance policy.

What is the difference between a fixed annuity and a variable annuity?

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

Another name for a straight term policy is

Which of the following is NOT a factor that affects the price a company charges for a life insurance policy?

All individuals need life insurance.

Which of the following is a poor choice for the amount of protection offered for an individual?

The most widely used settlement option for a life insurance program is the lump-sum payment.

Annuities are most beneficial for individuals who expect to live only a short time.

Return-of-premium term pays out all premiums plus interest to a beneficiary.

Mutual life insurance companies specialize in the sale of nonparticipating policies.

Premium payments are fixed with a variable life policy.

Amy bought a life insurance policy and named Ben as her beneficiary.She has since died.Who will receive the benefits from her policy?

Compare and contrast life insurance and annuities.

Judy and James have a 4-year-old child.They plan to purchase life insurance using this formula: Current income × 7 × 70%.Which method are they using to determine their life insurance needs?

You want to purchase a life insurance policy that pays a dividend.What kind of policy would you want to purchase?

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

Frank,age 38,was hit by a car and died.Which of the following riders provided an additional benefit for his heirs?

The lower the interest-adjusted index,the lower the cost of a life insurance policy.

What is the difference between a fixed annuity and a variable annuity?

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

Another name for a straight term policy is

Which of the following is NOT a factor that affects the price a company charges for a life insurance policy?

All individuals need life insurance.

Which of the following is a poor choice for the amount of protection offered for an individual?

The most widely used settlement option for a life insurance program is the lump-sum payment.

Annuities are most beneficial for individuals who expect to live only a short time.

Return-of-premium term pays out all premiums plus interest to a beneficiary.

Mutual life insurance companies specialize in the sale of nonparticipating policies.

Premium payments are fixed with a variable life policy.

Amy bought a life insurance policy and named Ben as her beneficiary.She has since died.Who will receive the benefits from her policy?

Compare and contrast life insurance and annuities.

Judy and James have a 4-year-old child.They plan to purchase life insurance using this formula: Current income × 7 × 70%.Which method are they using to determine their life insurance needs?

You want to purchase a life insurance policy that pays a dividend.What kind of policy would you want to purchase?

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