Exam 8: Insuring Your Life

Alice is 40 years old and earns $85,000 annually.The multiple earnings approach to determine the amount of life insurance needed shows that she should have 6.5 times her earnings.How much insurance should Alice have? (Show all work.)

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 premium on your term insurance will likely [increase | stay the same] with each renewal.

The settlement option chosen by most beneficiaries 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. -[Level premium | annual renewable] term policies have become much more popular in recent years.

Which of the following types of policies is most likely to allow you to switch investments?

All types of life insurance offer a cash surrender value.

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 most accurate way to determine how much life insurance you need is to use the [multiple-of-earnings | needs analysis] method.

Life insurance policies with small face amounts where the premium may be collected weekly by agents is

Life insurance death benefits are,as a rule,subject to income taxes.

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 your insurance policy promises to pay death benefits only if you die during a specified time,you have [term | whole] life insurance.

A guaranteed purchase option is when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary.