Question 1

Which of the following types of insurance is intended to provide a limited choice of investments and an insurance component in the event of death?

Accepted Answer

A)  Whole life 
B)  Universal life 
C)  Term insurance 
D)  Mortgage life 
A)  Whole life 
B)  Universal life 
C)  Term insurance 
D)  Mortgage life

Question 2

The job marketability of your spouse

Accepted Answer

A)  would be a factor considered in the budget method of determining life insurance needs. 
B)  is used in the income method of determining life insurance needs. 
C)  is really not that important in determining life insurance needs. 
D)  is the main factor in determining whether or not you even need life insurance. 
A)  would be a factor considered in the budget method of determining life insurance needs. 
B)  is used in the income method of determining life insurance needs. 
C)  is really not that important in determining life insurance needs. 
D)  is the main factor in determining whether or not you even need life insurance.

Question 3

Use the following two columns of items to answer the matching questions below:
-variable life insurance

Accepted Answer

A) cash value and benefits to the beneficiary 
B) combination of term insurance and a savings plan 
C) premiums constant with reduced benefits 
D) term insurance with a variable investment portion 
A) cash value and benefits to the beneficiary 
B) combination of term insurance and a savings plan 
C) premiums constant with reduced benefits 
D) term insurance with a variable investment portion

Question 4

Use the following two columns of items to answer the matching questions below:
-decreasing-term insurance

Accepted Answer

A) cash value and benefits to the beneficiary 
B) combination of term insurance and a savings plan 
C) premiums constant with reduced benefits 
D) term insurance with a variable investment portion 
A) cash value and benefits to the beneficiary 
B) combination of term insurance and a savings plan 
C) premiums constant with reduced benefits 
D) term insurance with a variable investment portion

Question 5

Which of the following is not a settlement option 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 6

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

Accepted Answer

A)  income 
B)  asset 
C)  balance sheet 
D)  budget 
A)  income 
B)  asset 
C)  balance sheet 
D)  budget

Question 7

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.

Accepted Answer

A)  $100,000 
B)  $200,000 
C)  $300,000 
D)  $500,000 
A)  $100,000 
B)  $200,000 
C)  $300,000 
D)  $500,000

Question 8

Which of the following does not represent a financial goal related to life insurance?

Accepted Answer

A)  Provide funds for retirement 
B)  Maintain financial support for your dependents 
C)  Provide funds to cover burial costs 
D)  Provide funds to support your parents 
A)  Provide funds for retirement 
B)  Maintain financial support for your dependents 
C)  Provide funds to cover burial costs 
D)  Provide funds to support your parents

Question 9

All of the following are true of the income method of determining life insurance needs except it

Accepted Answer

A)  is easy to use. 
B)  does not consider your age. 
C)  factors in the number of children in your family. 
D)  doesn't figure in savings or investments. 
A)  is easy to use. 
B)  does not consider your age. 
C)  factors in the number of children in your family. 
D)  doesn't figure in savings or investments.

Question 10

You are the beneficiary of a $200,000 life insurance policy that has both a lump-sum option and an annuity option.The annuity option pays $20,000 per year for a 15 year period beginning at the end of the year.Using your financial calculator or the tables in the book,determine the minimum rate of return you must be assured of earning over the 15 year period if you were to choose the $200,000 lump-sum settlement.

Accepted Answer

A)  5.6% 
B)  6% 
C)  3.25% 
D)  7.2% 
A)  5.6% 
B)  6% 
C)  3.25% 
D)  7.2%

Question 11

A lump-sum insurance settlement would be most appropriate for

Accepted Answer

A)  a surviving spouse with small children. 
B)  parents living in a nursing home. 
C)  a disciplined beneficiary. 
D)  a former spouse. 
A)  a surviving spouse with small children. 
B)  parents living in a nursing home. 
C)  a disciplined beneficiary. 
D)  a former spouse.

Question 12

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) retirement plan. 
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) retirement plan. 
D)  a good starting point.

Question 13

In using the Internet to price insurance,which of the following is not true?

Accepted Answer

A)  It is fast and convenient. 
B)  It is usually more expensive. 
C)  There is less pressure. 
D)  You can compare rates among several companies at once. 
A)  It is fast and convenient. 
B)  It is usually more expensive. 
C)  There is less pressure. 
D)  You can compare rates among several companies at once.

Question 14

Use the following two columns of items to answer the matching questions below:
-lump-sum settlement

Accepted Answer

A) alternative ways a beneficiary can receive benefits 
B) a single payment to the beneficiary 
A) alternative ways a beneficiary can receive benefits 
B) a single payment to the beneficiary

Question 15

Which type of life insurance allows policyholders to make their own investment decisions?

Accepted Answer

A)  Whole life 
B)  Group life 
C)  Variable life 
D)  Deferred term life 
A)  Whole life 
B)  Group life 
C)  Variable life 
D)  Deferred term life

Question 16

What are three types of settlement options?

Accepted Answer

Lump-sum,installment

Question 17

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

Accepted Answer

A)  fixed; no 
B)  variable; a 
C)  fixed; a 
D)  variable; no 
A)  fixed; no 
B)  variable; a 
C)  fixed; a 
D)  variable; no

Question 18

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

One advantage of whole life insurance over term life insurance is

Accepted Answer

A)  premiums are not affected by age. 
B)  whole life insurance forces people to save money. 
C)  whole life insurance is less expensive than term life. 
D)  whole life does not build cash value while term life does. 
A)  premiums are not affected by age. 
B)  whole life insurance forces people to save money. 
C)  whole life insurance is less expensive than term life. 
D)  whole life does not build cash value while term life does.

Which of the following types of insurance is intended to provide a limited choice of investments and an insurance component in the event of death?

The job marketability of your spouse

Use the following two columns of items to answer the matching questions below: -variable life insurance

Use the following two columns of items to answer the matching questions below: -decreasing-term insurance

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

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

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.

Which of the following does not represent a financial goal related to life insurance?

All of the following are true of the income method of determining life insurance needs except it

A lump-sum insurance settlement would be most appropriate for

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

In using the Internet to price insurance,which of the following is not true?

Use the following two columns of items to answer the matching questions below: -lump-sum settlement

Which type of life insurance allows policyholders to make their own investment decisions?

What are three types of settlement options?

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

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

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

One advantage of whole life insurance over term life insurance is

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

Which of the following types of insurance is intended to provide a limited choice of investments and an insurance component in the event of death?

The job marketability of your spouse

Use the following two columns of items to answer the matching questions below: -variable life insurance

Use the following two columns of items to answer the matching questions below: -decreasing-term insurance

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

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

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.

Which of the following does not represent a financial goal related to life insurance?

All of the following are true of the income method of determining life insurance needs except it

A lump-sum insurance settlement would be most appropriate for

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

In using the Internet to price insurance,which of the following is not true?

Use the following two columns of items to answer the matching questions below: -lump-sum settlement

Which type of life insurance allows policyholders to make their own investment decisions?

What are three types of settlement options?

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

Life insurance may not be that important for a couple who both work full-time and who could each be self-sufficient without the other person's income.

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

One advantage of whole life insurance over term life insurance is

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

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