Question 1

Insurance is a tool that can lessen ____ risk.

Accepted Answer

A)  social 
B)  mental 
C)  economic 
D)  accident 
E)  exposure 
A)  social 
B)  mental 
C)  economic 
D)  accident 
E)  exposure

Question 2

Underwriting is best described as:

Accepted Answer

A)  Activities related to selecting acceptable risks so that general insurer objectives are met. 
B)  Actuarial science 
C)  Production-related activities performed primarily by agents in the field 
D)  Process of developing pricing structures for insurance,often performed by an actuary 
E)  A function most often performed by adjusters. 
A)  Activities related to selecting acceptable risks so that general insurer objectives are met. 
B)  Actuarial science 
C)  Production-related activities performed primarily by agents in the field 
D)  Process of developing pricing structures for insurance,often performed by an actuary 
E)  A function most often performed by adjusters.

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Annual premiums would be lower with [continuous | limited payment] 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

Guaranteed renewable term insurance allows you to renew the policy for another term without qualifying medically.

Accepted Answer

A) True 
 B)False

Question 5

Underwriting is

Accepted Answer

A)  selling insurance at a premium less than that of the competition. 
B)  payment of a claim. 
C)  a method for developing policy wording. 
D)  the determination of which exposures to insure. 
E)  none of these. 
A)  selling insurance at a premium less than that of the competition. 
B)  payment of a claim. 
C)  a method for developing policy wording. 
D)  the determination of which exposures to insure. 
E)  none of these.

Question 6

Because premiums get higher as you age,it is probably advisable for you to buy life insurance at age 20 to save money whether or not you need the insurance then.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following companies does NOT rate the financial strength of life insurance companies?

Accepted Answer

A)  A.M.Best 
B)  Moody's 
C)  Duff & Phelps 
D)  Weiss 
E)  Welch's 
A)  A.M.Best 
B)  Moody's 
C)  Duff & Phelps 
D)  Weiss 
E)  Welch's

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-If a loss is certain to occur,there is [a | no] risk.

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 9

The right of the policyholder to the cash value of a whole life policy is a nonforfeiture right.

Accepted Answer

A) True 
 B)False

Question 10

Social security benefits are often available resources to the family after the death of a family member.

Accepted Answer

A) True 
 B)False

Question 11

The basic assumptions that the company used to compute its life insurance premiums include all but

Accepted Answer

A)  age 
B)  sex 
C)  health status 
D)  income 
E)  none of the above 
A)  age 
B)  sex 
C)  health status 
D)  income 
E)  none of the above

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Using the needs approach,we look at the survivors' needs if the income producer dies [tomorrow | before his life expectancy].

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 13

The basic purpose of insurance is to

Accepted Answer

A)  protect your health. 
B)  protect you from losses. 
C)  supplement your income. 
D)  shield you from bad decisions. 
E)  none of these 
A)  protect your health. 
B)  protect you from losses. 
C)  supplement your income. 
D)  shield you from bad decisions. 
E)  none of these

Question 14

____ and ____ are both relatively expensive types of decreasing-term life insurance.

Accepted Answer

A)  Group life; credit life 
B)  Credit life; mortgage life 
C)  Mortgage life; industrial life 
D)  Industrial life; special-purpose policies 
E)  Special-purpose policies; group life 
A)  Group life; credit life 
B)  Credit life; mortgage life 
C)  Mortgage life; industrial life 
D)  Industrial life; special-purpose policies 
E)  Special-purpose policies; group life

Question 15

Lump-sum distributions of death benefits are generally excluded from federal income tax.

Accepted Answer

A) True 
 B)False

Question 16

Spreading risk among a large number of people is a major principle of insurance.

Accepted Answer

A) True 
 B)False

Question 17

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for between 20% to 25% of total premiums paid over the life of the policy.

Accepted Answer

A) True 
 B)False

Insurance is a tool that can lessen ____ risk.

Underwriting is best described as:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Annual premiums would be lower with [continuous | limited payment] whole life insurance.

Guaranteed renewable term insurance allows you to renew the policy for another term without qualifying medically.

Underwriting is

Because premiums get higher as you age,it is probably advisable for you to buy life insurance at age 20 to save money whether or not you need the insurance then.

Which of the following companies does NOT rate the financial strength of life insurance companies?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If a loss is certain to occur,there is [a | no] risk.

The right of the policyholder to the cash value of a whole life policy is a nonforfeiture right.

Social security benefits are often available resources to the family after the death of a family member.

The basic assumptions that the company used to compute its life insurance premiums include all but

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Using the needs approach,we look at the survivors' needs if the income producer dies [tomorrow | before his life expectancy].

The basic purpose of insurance is to

and are both relatively expensive types of decreasing-term life insurance.

Lump-sum distributions of death benefits are generally excluded from federal income tax.

Spreading risk among a large number of people is a major principle of insurance.

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for between 20% to 25% of total premiums paid over the life of the policy.

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

Insurance is a tool that can lessen ____ risk.

Underwriting is best described as:

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Annual premiums would be lower with [continuous | limited payment] whole life insurance.

Guaranteed renewable term insurance allows you to renew the policy for another term without qualifying medically.

Underwriting is

Because premiums get higher as you age,it is probably advisable for you to buy life insurance at age 20 to save money whether or not you need the insurance then.

Which of the following companies does NOT rate the financial strength of life insurance companies?

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -If a loss is certain to occur,there is [a | no] risk.

The right of the policyholder to the cash value of a whole life policy is a nonforfeiture right.

Social security benefits are often available resources to the family after the death of a family member.

The basic assumptions that the company used to compute its life insurance premiums include all but

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Using the needs approach,we look at the survivors' needs if the income producer dies [tomorrow | before his life expectancy].

The basic purpose of insurance is to

____ and ____ are both relatively expensive types of decreasing-term life insurance.

Lump-sum distributions of death benefits are generally excluded from federal income tax.

Spreading risk among a large number of people is a major principle of insurance.

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for between 20% to 25% of total premiums paid over the life of the policy.

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

and are both relatively expensive types of decreasing-term life insurance.