Question 1

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

Accepted Answer

A) True 
 B)False

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The [lump sum | life income] settlement option is the most commonly selected option.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-If your insurance policy promises to pay death benefits only if you die during a specified time,you have [term | whole] life insurance.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 4

The needs approach can determine your life insurance requirements with a single step.

Accepted Answer

A) True 
 B)False

Question 5

Underwriting helps protect life insurance companies from which of the following:

Accepted Answer

A)  major downturns in the economy 
B)  short-term shocks in the investment markets 
C)  adverse selection 
D)  having too many healthy people buy life insurance 
E)  shifts in the macro-social structure of the population 
A)  major downturns in the economy 
B)  short-term shocks in the investment markets 
C)  adverse selection 
D)  having too many healthy people buy life insurance 
E)  shifts in the macro-social structure of the population

Question 6

The return on term life insurance policies receive favorable tax treatment.

Accepted Answer

A) True 
 B)False

Question 7

Nonforfeiture rights guarantee that a policy owner will not lose his or her ____.

Accepted Answer

A)  face value. 
B)  death benefits for survivors. 
C)  cash value. 
D)  premium refunds. 
E)  premium reductions. 
A)  face value. 
B)  death benefits for survivors. 
C)  cash value. 
D)  premium refunds. 
E)  premium reductions.

Question 8

The most valuable single technique in personal risk management to assist an individual in determining how much life insurance is needed is:

Accepted Answer

A)  Computing the Human Life Value. 
B)  Using the probability of death each year,prevailing interest rates and assumed inflation rates to find the discounted present value of a future income stream. 
C)  Assessing the family's total economic needs and subtracting financial resources available to meet those needs. 
D)  Estimating the sum of money which,when paid in installments,will produce the same income as the person would have earned,after deducting assumed amounts for taxes and personal maintenance expenses. 
E)  Using a multiple of earnings adjusted for occupation. 
A)  Computing the Human Life Value. 
B)  Using the probability of death each year,prevailing interest rates and assumed inflation rates to find the discounted present value of a future income stream. 
C)  Assessing the family's total economic needs and subtracting financial resources available to meet those needs. 
D)  Estimating the sum of money which,when paid in installments,will produce the same income as the person would have earned,after deducting assumed amounts for taxes and personal maintenance expenses. 
E)  Using a multiple of earnings adjusted for occupation.

Question 9

____ can be both an advantage and a disadvantage of universal life insurance.

Accepted Answer

A)  Flexible premiums 
B)  Tax features 
C)  High returns 
D)  Unbundling 
E)  fixed returns 
A)  Flexible premiums 
B)  Tax features 
C)  High returns 
D)  Unbundling 
E)  fixed returns

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-A life insurance agent who takes her profession seriously is likely to have earned the [CPCU | CLU] professional certification.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

Accepted Answer

A)  universal life 
B)  whole life 
C)  variable life 
D)  term life 
E)  adjustable whole life 
A)  universal life 
B)  whole life 
C)  variable life 
D)  term life 
E)  adjustable whole life

Question 12

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least ___ % of the first year's premium and at least ___% of total premiums paid over the life of the policy.

Accepted Answer

A)  20,5 
B)  50,10 
C)  75,25 
D)  100,20 
E)  200,50 
A)  20,5 
B)  50,10 
C)  75,25 
D)  100,20 
E)  200,50

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-A [viatical settlement | guaranteed purchase option] is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 14

If life insurance is convertible,the policy can be

Accepted Answer

A)  transferred to the life of another person. 
B)  exchanged for cash. 
C)  changed to health or disability protection 
D)  changed to another type of life insurance. 
E)  revised as needed. 
A)  transferred to the life of another person. 
B)  exchanged for cash. 
C)  changed to health or disability protection 
D)  changed to another type of life insurance. 
E)  revised as needed.

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-It [is | is not] possible to avoid most risks in your life.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-You would be most likely to assume the risk of a [small | large] potential loss.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 17

For the insured who needs more life insurance,the best option for receiving policy dividends is to

Accepted Answer

A)  receive them as cash payments. 
B)  leave the dividends with the insurance company to earn interest. 
C)  buy additional paid-up coverage. 
D)  apply them toward the next premium payment. 
E)  take living benefits. 
A)  receive them as cash payments. 
B)  leave the dividends with the insurance company to earn interest. 
C)  buy additional paid-up coverage. 
D)  apply them toward the next premium payment. 
E)  take living benefits.

Question 18

Rodney and Toni are a young couple with two small children.They are doing well financially but their life insurance needs are high and their budget is tight.What type of life insurance will give them the most protection for their money?

Accepted Answer

A)  continuous premium 
B)  universal life 
C)  paid up life 
D)  term life 
E)  variable life 
A)  continuous premium 
B)  universal life 
C)  paid up life 
D)  term life 
E)  variable life

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The beneficiary [will | will not] have to pay income taxes on the proceeds from a life insurance policy.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Living benefits would [increase | decrease] the proceeds available for beneficiaries.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The [lump sum | life income] settlement option is the most commonly selected option.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If your insurance policy promises to pay death benefits only if you die during a specified time,you have [term | whole] life insurance.

The needs approach can determine your life insurance requirements with a single step.

Underwriting helps protect life insurance companies from which of the following:

The return on term life insurance policies receive favorable tax treatment.

Nonforfeiture rights guarantee that a policy owner will not lose his or her ____.

The most valuable single technique in personal risk management to assist an individual in determining how much life insurance is needed is:

____ can be both an advantage and a disadvantage of universal life insurance.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -A life insurance agent who takes her profession seriously is likely to have earned the [CPCU | CLU] professional certification.

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least _ % of the first year's premium and at least _% of total premiums paid over the life of the policy.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -A [viatical settlement | guaranteed purchase option] is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.

If life insurance is convertible,the policy can be

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -It [is | is not] possible to avoid most risks in your life.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You would be most likely to assume the risk of a [small | large] potential loss.

For the insured who needs more life insurance,the best option for receiving policy dividends is to

Rodney and Toni are a young couple with two small children.They are doing well financially but their life insurance needs are high and their budget is tight.What type of life insurance will give them the most protection for their money?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The beneficiary [will | will not] have to pay income taxes on the proceeds from a life insurance policy.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Living benefits would [increase | decrease] the proceeds available for beneficiaries.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 8: Insuring Your Life

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The [lump sum | life income] settlement option is the most commonly selected option.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If your insurance policy promises to pay death benefits only if you die during a specified time,you have [term | whole] life insurance.

The needs approach can determine your life insurance requirements with a single step.

Underwriting helps protect life insurance companies from which of the following:

The return on term life insurance policies receive favorable tax treatment.

Nonforfeiture rights guarantee that a policy owner will not lose his or her ____.

The most valuable single technique in personal risk management to assist an individual in determining how much life insurance is needed is:

____ can be both an advantage and a disadvantage of universal life insurance.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -A life insurance agent who takes her profession seriously is likely to have earned the [CPCU | CLU] professional certification.

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least ___ % of the first year's premium and at least ___% of total premiums paid over the life of the policy.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -A [viatical settlement | guaranteed purchase option] is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.

If life insurance is convertible,the policy can be

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -It [is | is not] possible to avoid most risks in your life.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -You would be most likely to assume the risk of a [small | large] potential loss.

For the insured who needs more life insurance,the best option for receiving policy dividends is to

Rodney and Toni are a young couple with two small children.They are doing well financially but their life insurance needs are high and their budget is tight.What type of life insurance will give them the most protection for their money?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The beneficiary [will | will not] have to pay income taxes on the proceeds from a life insurance policy.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Living benefits would [increase | decrease] the proceeds available for beneficiaries.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least _ % of the first year's premium and at least _% of total premiums paid over the life of the policy.