Question 1

Which of the following is not a method of settlement options for life insurance?

Accepted Answer

A) Lump-sum settlement 
B) Deferred-value settlement 
C) Installment payments settlement 
D) Interest payments settlement 
A) Lump-sum settlement 
B) Deferred-value settlement 
C) Installment payments settlement 
D) Interest payments settlement

Question 2

The budget method is based upon all of the following except

Accepted Answer

A) the amount of debt you owe. 
B) your annual income. 
C) the value of your existing savings. 
D) special expenses you will need. 
A) the amount of debt you owe. 
B) your annual income. 
C) the value of your existing savings. 
D) special expenses you will need.

Question 3

A disadvantage of whole life policies is that

Accepted Answer

A) the premiums are not predictable. 
B) they are much more expensive than term policies. 
C) the face value of the policy can change over time. 
D) the cash value is frozen and not available to policyholders. 
A) the premiums are not predictable. 
B) they are much more expensive than term policies. 
C) the face value of the policy can change over time. 
D) the cash value is frozen and not available to policyholders.

Question 4

Disadvantages of term insurance are that it increases in cost when you renew it and that it has no value when it matures or you discontinue your policy.

Accepted Answer

A) True 
 B)False

Question 5

________ life insurance can only by used to pay off a home in the event of the policyholder's death.

Accepted Answer

A) Mortgage 
B) Decreasing-term 
C) Universal life 
D) Homeowner 
A) Mortgage 
B) Decreasing-term 
C) Universal life 
D) Homeowner

Question 6

The least expensive form of life insurance is

Accepted Answer

A) term. 
B) whole life. 
C) universal life. 
D) variable life. 
A) term. 
B) whole life. 
C) universal life. 
D) variable life.

Question 7

The ________ in a life insurance policy allows the beneficiary to receive the proceeds in different ways.

Accepted Answer

The answer of The ________ in a life insurance policy...

Question 8

Life insurance proceeds are generally not taxable to the

Accepted Answer

A) insured. 
B) beneficiary. 
C) administrator. 
D) benefactor. 
A) insured. 
B) beneficiary. 
C) administrator. 
D) benefactor.

Question 9

Which of the following will increase your need for life insurance?

Accepted Answer

A) Your spouse graduates from college 
B) You receive a large inheritance 
C) Your only child graduates from college 
D) You get married 
A) Your spouse graduates from college 
B) You receive a large inheritance 
C) Your only child graduates from college 
D) You get married

Question 10

The beneficiaries of life insurance policies can only be family members or those directly impacted by a person's death.

Accepted Answer

A) True 
 B)False

Question 11

Insurance companies are assigned ratings by all of the following except

Accepted Answer

A) Moody's. 
B) Standard and Poor's. 
C) Securities and Exchange Commission. 
D) 
A) M.Best. 
A) Moody's. 
B) Standard and Poor's. 
C) Securities and Exchange Commission. 
D) 
A) M.Best.

Question 12

The easiest method of estimating your life insurance needs is the

Accepted Answer

A) life cycle approach. 
B) budget approach. 
C) financial approach. 
D) income approach. 
A) life cycle approach. 
B) budget approach. 
C) financial approach. 
D) income approach.

Question 13

The income method of determining how much life insurance coverage you need is

Accepted Answer

A) based on future family expenses. 
B) based on the age of your children. 
C) based on the amount of your 401(k). 
D) a good starting point. 
A) based on future family expenses. 
B) based on the age of your children. 
C) based on the amount of your 401(k). 
D) a good starting point.

Question 14

What are the three most popular types of life insurance?

Accepted Answer

Term,whole

Question 15

Term life insurance is considered temporary insurance,since the policy is only in effect for a relatively short period of time.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not a type of life insurance covered in the text?

Accepted Answer

A) Term 
B) Dependent life 
C) Whole life 
D) Universal life 
A) Term 
B) Dependent life 
C) Whole life 
D) Universal life

Question 17

Your need for life insurance will last for 20 years.You also wish to save some money over that same time period.What kind of life insurance would fill this requirement?

Accepted Answer

A) Term 
B) Decreasing term 
C) Universal life 
D) Deferred life insurance 
A) Term 
B) Decreasing term 
C) Universal life 
D) Deferred life insurance

Question 18

The best substitute for mortgage insurance would be ________ insurance.

Accepted Answer

A) decreasing term 
B) whole life 
C) universal life 
D) variable life 
A) decreasing term 
B) whole life 
C) universal life 
D) variable life

Question 19

The constitutional beneficiary is the person who will receive the death benefits if the primary beneficiary is no longer living when the policyholder dies.

Accepted Answer

A) True 
 B)False

Question 20

How much insurance would be needed in order to provide for a family for 20 years if the pretax income necessary to cover living expenses is $50,000 and the money can be invested at 6 percent?
(a)$573,500
(b)$1,000,000
(c)$833,333
(d)$2,100,000

Accepted Answer

(a)$50,000 × 11.47 (

Exam 13: Life Insurance

Which of the following is not a method of settlement options for life insurance?

The budget method is based upon all of the following except

A disadvantage of whole life policies is that

Disadvantages of term insurance are that it increases in cost when you renew it and that it has no value when it matures or you discontinue your policy.

________ life insurance can only by used to pay off a home in the event of the policyholder's death.

The least expensive form of life insurance is

The ________ in a life insurance policy allows the beneficiary to receive the proceeds in different ways.

Life insurance proceeds are generally not taxable to the

Which of the following will increase your need for life insurance?

The beneficiaries of life insurance policies can only be family members or those directly impacted by a person's death.

Insurance companies are assigned ratings by all of the following except

The easiest method of estimating your life insurance needs is the

The income method of determining how much life insurance coverage you need is

What are the three most popular types of life insurance?

Term life insurance is considered temporary insurance,since the policy is only in effect for a relatively short period of time.

Which of the following is not a type of life insurance covered in the text?

Your need for life insurance will last for 20 years.You also wish to save some money over that same time period.What kind of life insurance would fill this requirement?

The best substitute for mortgage insurance would be ________ insurance.

The constitutional beneficiary is the person who will receive the death benefits if the primary beneficiary is no longer living when the policyholder dies.

How much insurance would be needed in order to provide for a family for 20 years if the pretax income necessary to cover living expenses is $50,000 and the money can be invested at 6 percent? (a)$573,500 (b)$1,000,000 (c)$833,333 (d)$2,100,000

Overview of a Financial Plan

Planning With Personal Financial Statements

Applying Time Value Concepts

Using Tax Concepts for Planning

Banking and Interest Rates

Managing Your Money

Assessing and Securing Your Credit

Managing Your Credit

Personal Loans

Purchasing and Financing a Home

Auto and Homeowners Insurance

Health and Disability Insurance

Investing Fundamentals

Investing in Stocks

Investing in Bonds

Investing in Mutual Funds

Asset Allocation

Retirement Planning

Estate Planning

Integrating the Components of a Financial Plan

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