Question 1

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

Accepted Answer

A) True 
 B)False

Question 2

The returns on term life insurance policies receive favorable tax treatment.

Accepted Answer

A) True 
 B)False

Question 3

Underwriting helps protect life insurance companies from which of the following?

Accepted Answer

A) Major downturns in the economy 
B) Short-term shocks in the investment markets 
C) Adverse selection 
D) Having too many healthy people buy life insurance 
E) Shifts in the macro-social structure of the population 
A) Major downturns in the economy 
B) Short-term shocks in the investment markets 
C) Adverse selection 
D) Having too many healthy people buy life insurance 
E) Shifts in the macro-social structure of the population

Question 4

Which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability?

Accepted Answer

A) multiple indemnity clause 
B) guaranteed purchase options 
C) disability clause 
D) paid-up insurance option 
E) extended-term option 
A) multiple indemnity clause 
B) guaranteed purchase options 
C) disability clause 
D) paid-up insurance option 
E) extended-term option

Question 5

With low-load whole life policies,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

Question 6

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-If you have $300 per year available for life insurance,you could get higher life insurance protection with a [continuous premium | limited payment] policy.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

Whole life insurance is designed to provide

Accepted Answer

A) protection only. 
B) savings only. 
C) savings and loan value. 
D) protection and savings. 
E) loan value only. 
A) protection only. 
B) savings only. 
C) savings and loan value. 
D) protection and savings. 
E) loan value only.

Question 8

Should the cash value grow to an unusually large amount,the amount of insurance coverage must be increased in order for the policy to retain its favorable tax treatment.

Accepted Answer

A) True 
 B)False

Question 9

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least ___ % of the first year's premium and at least ___% of total premiums paid over the life of the policy.

Accepted Answer

A) 20, 5 
B) 50, 10 
C) 75, 25 
D) 100, 20 
E) 200, 50 
A) 20, 5 
B) 50, 10 
C) 75, 25 
D) 100, 20 
E) 200, 50

Question 10

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-The majority of term policies have a [level | decreasing] face value.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs.

Accepted Answer

A) True 
 B)False

Question 12

A ____ option allows a terminally ill insurance holder to sell an interest in the life insurance policy to an investor.

Accepted Answer

A) participating policy 
B) living benefit 
C) viatical settlement 
D) guaranteed purchase 
E) none of the above 
A) participating policy 
B) living benefit 
C) viatical settlement 
D) guaranteed purchase 
E) none of the above

Question 13

The primary purpose of life insurance is to protect family members financially after one's death.

Accepted Answer

A) True 
 B)False

Question 14

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-In order to predict accurately the number of losses that will occur in a given time,insurance companies must study [large | small] numbers of cases.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 15

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-[Credit life | Group] insurance is one of the most expensive forms of life insurance.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 16

A waiver-of-premium benefit excuses premium payments if the insured becomes totally and permanently disabled.

Accepted Answer

A) True 
 B)False

Question 17

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-People share losses through [loss control | insurance].

Accepted Answer

The answer of Choose the word or phrase in [...

Question 18

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-A [viatical settlement | guaranteed purchase option] allows a terminally ill insured to receive benefits before death.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 19

The insurance portion of a universal life policy is most analogous to

Accepted Answer

A) mortgage insurance. 
B) group insurance. 
C) whole life insurance. 
D) term insurance. 
E) variable insurance. 
A) mortgage insurance. 
B) group insurance. 
C) whole life insurance. 
D) term insurance. 
E) variable insurance.

Question 20

When you stop making premium payments on a whole life policy,the policy's cash value is forfeited.

Accepted Answer

A) True 
 B)False

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

The returns on term life insurance policies receive favorable tax treatment.

Underwriting helps protect life insurance companies from which of the following?

Which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability?

With low-load whole life policies,sales commissions and marketing expenses account for between 20% to 25% of total premiums paid over the life of the policy.

Whole life insurance is designed to provide

Should the cash value grow to an unusually large amount,the amount of insurance coverage must be increased in order for the policy to retain its favorable tax treatment.

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least _ % of the first year's premium and at least _% of total premiums paid over the life of the policy.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of term policies have a [level | decreasing] face value.

The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs.

A ____ option allows a terminally ill insurance holder to sell an interest in the life insurance policy to an investor.

The primary purpose of life insurance is to protect family members financially after one's death.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Credit life | Group] insurance is one of the most expensive forms of life insurance.

A waiver-of-premium benefit excuses premium payments if the insured becomes totally and permanently disabled.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -People share losses through [loss control | insurance].

The insurance portion of a universal life policy is most analogous to

When you stop making premium payments on a whole life policy,the policy's cash value is forfeited.

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

Generally,the primary purpose of life insurance is to provide a tax-advantaged investment plan.

The returns on term life insurance policies receive favorable tax treatment.

Underwriting helps protect life insurance companies from which of the following?

Which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability?

With low-load whole life policies,sales commissions and marketing expenses account for between 20% to 25% of total premiums paid over the life of the policy.

Whole life insurance is designed to provide

Should the cash value grow to an unusually large amount,the amount of insurance coverage must be increased in order for the policy to retain its favorable tax treatment.

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least ___ % of the first year's premium and at least ___% of total premiums paid over the life of the policy.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of term policies have a [level | decreasing] face value.

The need for additional life insurance can be determined by looking at the difference between available resources and family monetary needs.

A ____ option allows a terminally ill insurance holder to sell an interest in the life insurance policy to an investor.

The primary purpose of life insurance is to protect family members financially after one's death.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Credit life | Group] insurance is one of the most expensive forms of life insurance.

A waiver-of-premium benefit excuses premium payments if the insured becomes totally and permanently disabled.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -People share losses through [loss control | insurance].

The insurance portion of a universal life policy is most analogous to

When you stop making premium payments on a whole life policy,the policy's cash value is forfeited.

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

With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for at least _ % of the first year's premium and at least _% of total premiums paid over the life of the policy.