Exam 8: Insuring Your Life

Level premium term policies have become much more popular than annual renewable term policies in recent years.

Key features found in most life insurance contracts include

Which of the following companies does not rate the financial strength of life insurance companies?

With most insurers,paying life insurance premiums on a(n)____ basis will allow you to avoid a fee.

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. -You would be most likely to assume the risk of a [small | large] potential loss.

The basic purpose of all insurance is to

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. -Any activity that reduces the chance that a loss will occur constitutes [risk shifting | loss prevention].

Nearly all life insurance policies have a two-year suicide clause.

____ can be both an advantage and a disadvantage of universal life insurance.

Marco is 45 years old and earns $65,000 annually.The multiple earnings approach to determine the amount of life insurance needed shows that he should have 6.0 times his annual earnings.An assessment shows total financial resources needed of $2,148,000 and total financial resources available of $1,848,000.Based on the needs analysis method,how much insurance should Marco have? (Show all work.)

Because premiums get higher as you age,it is probably advisable for you to buy life insurance at age 20 to save money whether or not you need the insurance then.

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 neither the primary nor secondary beneficiary survives the insured,the life insurance proceeds will be [kept by the insurance company | paid to the estate of the insured and distributed by the probate court].

If the insured dies during the grace period,the face amount of the policy less the unpaid premium is paid to the beneficiary.

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. -Deciding which people will be insured by an insurance company is a function of the [agent | underwriter].

Spreading risk among a large number of people is a major principle of insurance.

Universal life insurance is

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. -With traditional whole life policies sold by an agent,sales commissions and marketing expenses account for up to [25% | 150%] of the first year's premium.

The waiver-of-premium benefit excuses premium payment while the insured is experiencing short-term illness.

The needs analysis method can be used to determine your life insurance requirements with a single step.

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 life insurance agent who takes her profession seriously is likely to have earned the [CPCU | CLU] professional certification.