Question 1

Which of the following is NOT important when buying life insurance?

Accepted Answer

A)  Buying from a financially strong company 
B)  Buying from professionally qualified representatives 
C)  Ignoring the reputations of local agencies 
D)  Working with a representative who will help you select the proper kind of protection within your financial boundaries 
E)  Asking family or friends for recommendations to choose an insurance company 
A)  Buying from a financially strong company 
B)  Buying from professionally qualified representatives 
C)  Ignoring the reputations of local agencies 
D)  Working with a representative who will help you select the proper kind of protection within your financial boundaries 
E)  Asking family or friends for recommendations to choose an insurance company

Question 2

An administrative fee of $150 per year may be deducted to cover recordkeeping and other administrative expenses related to a variable annuity.

Accepted Answer

A) True 
 B)False

Question 3

Jeanne wants to purchase a life insurance policy with guaranteed premiums.What kind of policy would she 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

Question 4

A person who is named to receive the benefits from an insurance policy is a(n)

Accepted Answer

A)  Contract. 
B)  Beneficiary. 
C)  Policyholder. 
D)  Insurer. 
E)  Child. 
A)  Contract. 
B)  Beneficiary. 
C)  Policyholder. 
D)  Insurer. 
E)  Child.

Question 5

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Accepted Answer

A) True 
 B)False

Question 6

Georgia was supposed to pay her premium by the 15th of the month.Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium?

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 7

Which of the following allows an individual to receive a fixed amount of income over a certain period of time,or over his or her life?

Accepted Answer

A)  Fixed annuity 
B)  Term insurance 
C)  Whole insurance 
D)  Variable annuity 
E)  401(k) 
A)  Fixed annuity 
B)  Term insurance 
C)  Whole insurance 
D)  Variable annuity 
E)  401(k)

Question 8

Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following households most likely has the greatest need for life insurance?

Accepted Answer

A)  Single adult living alone. 
B)  Adult child living with parents. 
C)  Retired couple with a pension. 
D)  Household with children. 
E)  Independently wealthy adult. 
A)  Single adult living alone. 
B)  Adult child living with parents. 
C)  Retired couple with a pension. 
D)  Household with children. 
E)  Independently wealthy adult.

Question 10

Which of the following statements is incorrect?

Accepted Answer

A)  A deferred annuity allows an individual to receive payments from an annuity at some future date. 
B)  An immediate annuity allows an individual to receive payments from an annuity beginning at once. 
C)  A life insurance policy allows the beneficiary to receive proceeds at some future date. 
D)  An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 
E)  An insurance company will calculate the annual amounts to pay each person for an annuity. 
A)  A deferred annuity allows an individual to receive payments from an annuity at some future date. 
B)  An immediate annuity allows an individual to receive payments from an annuity beginning at once. 
C)  A life insurance policy allows the beneficiary to receive proceeds at some future date. 
D)  An annuity is more advisable for people in poor health than for those who are likely to live longer than average. 
E)  An insurance company will calculate the annual amounts to pay each person for an annuity.

Question 11

If you have a conversion term policy,

Accepted Answer

A)  Your premium will not increase when you renew it. 
B)  You can convert your policy from permanent to term at any time. 
C)  You can convert your term policy to a permanent policy. 
D)  Your policy will have the same premium as other term policies. 
E)  Your premium will be higher than a whole life policy premium. 
A)  Your premium will not increase when you renew it. 
B)  You can convert your policy from permanent to term at any time. 
C)  You can convert your term policy to a permanent policy. 
D)  Your policy will have the same premium as other term policies. 
E)  Your premium will be higher than a whole life policy premium.

Question 12

The policy loan provision means that

Accepted Answer

A)  An individual can take out a loan on his or her term policy. 
B)  The death benefit will be increased by the amount of an outstanding policy loan. 
C)  The policy owner can borrow any amount up to the cash value of the policy. 
D)  The beneficiary can borrow any amount up to the total benefit. 
E)  No interest will accumulate for any loans related to life insurance. 
A)  An individual can take out a loan on his or her term policy. 
B)  The death benefit will be increased by the amount of an outstanding policy loan. 
C)  The policy owner can borrow any amount up to the cash value of the policy. 
D)  The beneficiary can borrow any amount up to the total benefit. 
E)  No interest will accumulate for any loans related to life insurance.

Question 13

Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live.Which of the following riders would allow her to receive cash now?

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

If you have a renewable term policy,

Accepted Answer

A)  You may not purchase insurance once your term ends. 
B)  Your premium may increase if you continue it for another term because you will be older. 
C)  Your premium will not increase because your policy is renewable. 
D)  You can convert your policy to a permanent type at the end of the term. 
E)  None of these is correct. 
A)  You may not purchase insurance once your term ends. 
B)  Your premium may increase if you continue it for another term because you will be older. 
C)  Your premium will not increase because your policy is renewable. 
D)  You can convert your policy to a permanent type at the end of the term. 
E)  None of these is correct.

Question 15

Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need.If their youngest child is 5 years old,how much do they need?

Accepted Answer

A)  $13,000 
B)  $18,000 
C)  $50,000 
D)  $130,000 
E)  $180,000 
A)  $13,000 
B)  $18,000 
C)  $50,000 
D)  $130,000 
E)  $180,000

Question 16

Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase.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 need method 
A)  Easy method 
B)  Dual income, no kids method 
C)  Formal calculation method 
D)  Nonworking spouse method 
E)  Family need method

Question 17

The sooner a person is likely to die,the lower the premiums he or she will pay.

Accepted Answer

A) True 
 B)False

Question 18

Most people buy life insurance to

Accepted Answer

A)  Pay off a mortgage. 
B)  Protect the people who depend on the insured from financial losses caused by his or her death. 
C)  Pay for a vacation. 
D)  Spend money. 
E)  Pay taxes. 
A)  Pay off a mortgage. 
B)  Protect the people who depend on the insured from financial losses caused by his or her death. 
C)  Pay for a vacation. 
D)  Spend money. 
E)  Pay taxes.

Question 19

Which of the following is NOT a feature of whole life insurance?

Accepted Answer

A)  It accumulates cash value. 
B)  It provides both a death benefit and a savings component. 
C)  The policy will return all premiums if you survive to the end of the policy. 
D)  You must pay interest on any outstanding policy loans. 
E)  The policy requires that you pay a specified premium each year for the rest of your life. 
A)  It accumulates cash value. 
B)  It provides both a death benefit and a savings component. 
C)  The policy will return all premiums if you survive to the end of the policy. 
D)  You must pay interest on any outstanding policy loans. 
E)  The policy requires that you pay a specified premium each year for the rest of your life.

Question 20

Which of the following products allows an individual to receive payments beginning now?

Accepted Answer

A)  Term insurance 
B)  Deferred annuity 
C)  Whole life insurance 
D)  Immediate annuity 
E)  Universal life insurance 
A)  Term insurance 
B)  Deferred annuity 
C)  Whole life insurance 
D)  Immediate annuity 
E)  Universal life insurance

Which of the following is NOT important when buying life insurance?

An administrative fee of $150 per year may be deducted to cover recordkeeping and other administrative expenses related to a variable annuity.

Jeanne wants to purchase a life insurance policy with guaranteed premiums.What kind of policy would she want to purchase?

A person who is named to receive the benefits from an insurance policy is a(n)

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Georgia was supposed to pay her premium by the 15^th of the month.Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium?

Which of the following allows an individual to receive a fixed amount of income over a certain period of time,or over his or her life?

Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death.

Which of the following households most likely has the greatest need for life insurance?

Which of the following statements is incorrect?

If you have a conversion term policy,

The policy loan provision means that

Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live.Which of the following riders would allow her to receive cash now?

If you have a renewable term policy,

Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need.If their youngest child is 5 years old,how much do they need?

Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase.Which method are they using to determine their life insurance needs?

The sooner a person is likely to die,the lower the premiums he or she will pay.

Most people buy life insurance to

Which of the following is NOT a feature of whole life insurance?

Which of the following products allows an individual to receive payments beginning now?

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

Exam 10: Financial Planning With Life Insurance

Which of the following is NOT important when buying life insurance?

An administrative fee of $150 per year may be deducted to cover recordkeeping and other administrative expenses related to a variable annuity.

Jeanne wants to purchase a life insurance policy with guaranteed premiums.What kind of policy would she want to purchase?

A person who is named to receive the benefits from an insurance policy is a(n)

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Georgia was supposed to pay her premium by the 15th of the month.Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium?

Which of the following allows an individual to receive a fixed amount of income over a certain period of time,or over his or her life?

Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death.

Which of the following households most likely has the greatest need for life insurance?

Which of the following statements is incorrect?

If you have a conversion term policy,

The policy loan provision means that

Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live.Which of the following riders would allow her to receive cash now?

If you have a renewable term policy,

Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need.If their youngest child is 5 years old,how much do they need?

Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase.Which method are they using to determine their life insurance needs?

The sooner a person is likely to die,the lower the premiums he or she will pay.

Most people buy life insurance to

Which of the following is NOT a feature of whole life insurance?

Which of the following products allows an individual to receive payments beginning now?

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

Georgia was supposed to pay her premium by the 15^th of the month.Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium?