Question 1

Whole life insurance is also referred to as

Accepted Answer

A)  endowment life insurance. 
B)  universal life insurance. 
C)  group life insurance. 
D)  permanent insurance. 
A)  endowment life insurance. 
B)  universal life insurance. 
C)  group life insurance. 
D)  permanent insurance. D

Question 2

Using the income method and employing a factor of 10,determine the amount of insurance a couple would need if their net income is $65,000,their assets total $280,000,their liabilities total $130,000,their two children's anticipated college education needs total $730,000,and their invalid mother's future nursing home expenses total $290,000.

Accepted Answer

A)  $2,850,000 
B)  $1,500,000 
C)  $650,000 
D)  $730,000 
A)  $2,850,000 
B)  $1,500,000 
C)  $650,000 
D)  $730,000 C

Question 3

Term life insurance is

Accepted Answer

A)  often available in group policies through employers. 
B)  less expensive when you renew it. 
C)  pure insurance with no savings feature. 
D)  Both A and C are correct 
A)  often available in group policies through employers. 
B)  less expensive when you renew it. 
C)  pure insurance with no savings feature. 
D)  Both A and C are correct D

Question 4

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

Accepted Answer

A)  your expenses per month. 
B)  the number of your dependents. 
C)  some arbitrary number, such as 10. 
D)  your life expectancy. 
A)  your expenses per month. 
B)  the number of your dependents. 
C)  some arbitrary number, such as 10. 
D)  your life expectancy.

Question 5

If a policyholder with a universal life insurance policy skips a payment,then the insurance company

Accepted Answer

A)  terminates the policy. 
B)  refunds the amount paid and terminates the policy. 
C)  uses an amount from savings to pay the premium. 
D)  increases the premium. 
A)  terminates the policy. 
B)  refunds the amount paid and terminates the policy. 
C)  uses an amount from savings to pay the premium. 
D)  increases the premium.

Question 6

A disadvantage of term insurance is that

Accepted Answer

A)  it becomes more expensive when you renew it. 
B)  the cash value portion of the premium is larger than other forms. 
C)  you can only exchange your cash value for other insurance. 
D)  it is expensive early in life when you need it the most. 
A)  it becomes more expensive when you renew it. 
B)  the cash value portion of the premium is larger than other forms. 
C)  you can only exchange your cash value for other insurance. 
D)  it is expensive early in life when you need it the most.

Question 7

Which of the following is not an option as a way to use the cash value of your whole life policy?

Accepted Answer

A)  Borrow money from the policy at a low rate of interest 
B)  Cancel the policy and use the proceeds to buy term insurance in the same value as your whole life policy 
C)  Have the insurance company invest your cash value in stocks or mutual funds of your choosing 
D)  Cancel the policy and get your cash value returned to you 
A)  Borrow money from the policy at a low rate of interest 
B)  Cancel the policy and use the proceeds to buy term insurance in the same value as your whole life policy 
C)  Have the insurance company invest your cash value in stocks or mutual funds of your choosing 
D)  Cancel the policy and get your cash value returned to you

Question 8

Using the budget method of determining life insurance needs,a family's future expected expenses are considered.

Accepted Answer

A) True 
 B)False

Question 9

A person's need for life insurance varies quite a bit over his or her lifetime.

Accepted Answer

A) True 
 B)False

Question 10

A limited payment option on a whole life policy pays a smaller share of the policy face value to beneficiaries during the first five years of the policy.

Accepted Answer

A) True 
 B)False

Question 11

If your life follows the pattern of college-marriage-kids-retirement,your need for life insurance will

Accepted Answer

A)  steadily increase. 
B)  steadily decrease. 
C)  stay the same. 
D)  peak and then decline. 
A)  steadily increase. 
B)  steadily decrease. 
C)  stay the same. 
D)  peak and then decline.

Question 12

If your financial plan objective is to provide your family with the most insurance benefit in the event of your untimely death,you should purchase

Accepted Answer

A)  decreasing-term insurance. 
B)  term insurance. 
C)  universal life insurance. 
D)  whole life insurance. 
A)  decreasing-term insurance. 
B)  term insurance. 
C)  universal life insurance. 
D)  whole life insurance.

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

What are the three most popular types of life insurance?

Accepted Answer

Term,whole

Question 15

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 16

The budget method of estimating life insurance needs considers 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 incur. 
A)  the amount of debt you owe. 
B)  your annual income. 
C)  the value of your existing savings. 
D)  special expenses you will incur.

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 these requirements?

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

Low cost life insurance,often available without a physical exam,is generally offered by

Accepted Answer

A)  Internet insurance companies. 
B)  mutual insurance companies. 
C)  employer-sponsored group insurance plans. 
D)  independent insurance agents. 
A)  Internet insurance companies. 
B)  mutual insurance companies. 
C)  employer-sponsored group insurance plans. 
D)  independent insurance agents.

Question 19

Which of the following policies will not give you a cash settlement if you terminate the policy?

Accepted Answer

A)  Whole life 
B)  Universal life 
C)  Decreasing term life 
D)  Variable life 
A)  Whole life 
B)  Universal life 
C)  Decreasing term life 
D)  Variable life

Question 20

Which of the following will not affect the premiums on a term life insurance policy?

Accepted Answer

A)  Age of the policyholder 
B)  Percentage earned on savings portion of premium 
C)  Gender of the policyholder 
D)  Family medical history of the policyholder 
A)  Age of the policyholder 
B)  Percentage earned on savings portion of premium 
C)  Gender of the policyholder 
D)  Family medical history of the policyholder

Whole life insurance is also referred to as

Term life insurance is

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

If a policyholder with a universal life insurance policy skips a payment,then the insurance company

A disadvantage of term insurance is that

Which of the following is not an option as a way to use the cash value of your whole life policy?

Using the budget method of determining life insurance needs,a family's future expected expenses are considered.

A person's need for life insurance varies quite a bit over his or her lifetime.

A limited payment option on a whole life policy pays a smaller share of the policy face value to beneficiaries during the first five years of the policy.

If your life follows the pattern of college-marriage-kids-retirement,your need for life insurance will

If your financial plan objective is to provide your family with the most insurance benefit in the event of your untimely death,you should purchase

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.

What are the three most popular types of life insurance?

Insurance companies are assigned ratings by all of the following,except

The budget method of estimating life insurance needs considers all of the following,except

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 these requirements?

Low cost life insurance,often available without a physical exam,is generally offered by

Which of the following policies will not give you a cash settlement if you terminate the policy?

Which of the following will not affect the premiums on a term life insurance policy?

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

Filters

Exam 13: Life Insurance

Whole life insurance is also referred to as

Term life insurance is

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

If a policyholder with a universal life insurance policy skips a payment,then the insurance company

A disadvantage of term insurance is that

Which of the following is not an option as a way to use the cash value of your whole life policy?

Using the budget method of determining life insurance needs,a family's future expected expenses are considered.

A person's need for life insurance varies quite a bit over his or her lifetime.

A limited payment option on a whole life policy pays a smaller share of the policy face value to beneficiaries during the first five years of the policy.

If your life follows the pattern of college-marriage-kids-retirement,your need for life insurance will

If your financial plan objective is to provide your family with the most insurance benefit in the event of your untimely death,you should purchase

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.

What are the three most popular types of life insurance?

Insurance companies are assigned ratings by all of the following,except

The budget method of estimating life insurance needs considers all of the following,except

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 these requirements?

Low cost life insurance,often available without a physical exam,is generally offered by

Which of the following policies will not give you a cash settlement if you terminate the policy?

Which of the following will not affect the premiums on a term life insurance policy?

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

Filters