Exam 13: Life Insurance

If you determine your life insurance needs by considering your annual living expenses,special future expenses,debt,job marketability of spouse,and value of existing savings,you are using the ________ method.

Life insurance is an indication of good financial planning,since it provides a payment to the policyholder upon his or her death.

Advantages of whole life insurance policies are that they provide long-term coverage,the rates are fixed,and they have a savings or cash value feature.

Using the income method,if Jenny has an annual income of $50,000,debt of $20,000,and a factor of 10,then she should purchase ________ of life insurance.

Life insurance that provides insurance coverage for a specified term and also includes a savings option is called ________ insurance.

Universal life insurance is similar to whole life,but allows the policyholder more choices of how the savings portion of their premiums are invested.

In the ________ method,life insurance is determined as a multiple of your annual income.

A universal life policy gives policyholders the right to select their ________ that whole life policyholders do not have.

The income method,used to calculate your life insurance coverage,multiplies your current annual income by

If you buy a term insurance policy with a conversion option,this means that you

Which type of life insurance allows the policyholder to make his own individual investment decisions?

The job marketability of your spouse

Brad earns $50,000 per year as a manufacturer's rep and his wife,Nancy,earns $100,000 per year as an Oncologist.When they had children,Nancy left her practice to become a full-time mother.The family's expenses are $35,000 per year,which includes an amount being saved for the children's college education.Brad and Nancy have two children,ages 2 and 5.They receive an average return of 6 percent on their investments.Nancy has retained her active medical license and plans to return to work full-time when the children enter school.Using the budget method,how much life insurance should the family have in the event of Brad's death? (a)$344,100 (b)$573,500 (c)$1,147,000 (d)Zero

A disadvantage of term insurance is that

A disadvantage of variable life policies is that the cash value may actually decrease in value if stocks or other investments decline.

Whole life insurance has a ________ premium and has ________ cash value build up over the life of the policy.

Which of the following is false concerning term life insurance?

Life insurance proceeds are not used to

The more savings a household has accumulated,the less life insurance they will need.

Which of the following factors does not affect your life insurance premiums?