Question 1

If you have a good comprehensive health care policy,paying extra for disability income coverage is not a good use of your scarce insurance budget.

Accepted Answer

A) True 
 B)False  False

Question 2

Life insurance and health insurance are designed to transfer the catastrophic risk you can't afford to keep onto the insurance companies.

Accepted Answer

A) True 
 B)False  True

Question 3

Briefly explain the four common settlement options.

Accepted Answer

1.The lump-sum settlement gives a beneficiary the entire death benefit in one large check.
2.An interest-only settlement provides payment of interest while the company holds the principal.
3.The installment-payments option pays the beneficiary both principal and interest over a fixed period or in fixed payments.
4.A life annuity option gives the beneficiary an income for life,generally in a monthly check.

Question 4

Special provisions that may be added to your policy which either provide extra benefits to the beneficiary or limit the company's liability under certain conditions are known as

Accepted Answer

A) alternative provisions. 
B) secondary provisions. 
C) riders. 
D) attachments. 
E) none of the above. 
A) alternative provisions. 
B) secondary provisions. 
C) riders. 
D) attachments. 
E) none of the above.

Question 5

Which of the following term plans is intended to cover an individual's outstanding debt?

Accepted Answer

A) Renewable term 
B) Reentry term 
C) Credit life 
D) Mortgage life 
E) Both C and D above 
A) Renewable term 
B) Reentry term 
C) Credit life 
D) Mortgage life 
E) Both C and D above

Question 6

You might consider another insurance agent if your agent uses the ________ method to analyze the costs of a policy.

Accepted Answer

A) TNC 
B) IANC 
C) NCO 
D) TLC 
E) none of the above 
A) TNC 
B) IANC 
C) NCO 
D) TLC 
E) none of the above

Question 7

Using the needs approach to determine the amount of coverage looks from the perspective of the

Accepted Answer

A) policy owner. 
B) named insured. 
C) beneficiary. 
D) salesman. 
A) policy owner. 
B) named insured. 
C) beneficiary. 
D) salesman.

Question 8

Suppose that you earn $50,000 annually.You expect expenses to drop by 22% for your family in the event of your death.Currently,if you die,you want to provide for your family for at least 15 more years,and the applicable after-tax and inflation return assumed is 5%.Using the earnings multiple approach provided in your textbook,what would be the amount of life insurance that you should purchase?

Accepted Answer

A) $301,080 
B) $404,820 
C) $485,940 
D) $500,000 
E) $519,000 
A) $301,080 
B) $404,820 
C) $485,940 
D) $500,000 
E) $519,000

Question 9

Why is being the policy owner so important?

Accepted Answer

The policy owner controls the decisions

Question 10

The Health Insurance Marketplace is a new way for people to buy health insurance.To make plans easier to compare,the website presents plans in five categories with varying levels of cost-sharing.Which of the following plans is not offered?

Accepted Answer

A) Silver: Your plan pays 70 percent,you pay 30 percent. 
B) Gold: Your plan pays 80 percent,you pay 20 percent. 
C) Platinum: Your plan pays 90 percent,you pay 10 percent. 
D) Titanium: Your plan pays 100 percent,you pay nothing. 
E) Catastrophic: A coverage option if you are under 30 or have very low income. 
A) Silver: Your plan pays 70 percent,you pay 30 percent. 
B) Gold: Your plan pays 80 percent,you pay 20 percent. 
C) Platinum: Your plan pays 90 percent,you pay 10 percent. 
D) Titanium: Your plan pays 100 percent,you pay nothing. 
E) Catastrophic: A coverage option if you are under 30 or have very low income.

Question 11

Most long-term care policies require that you be unable to perform at least two ADL's.What are ADL's

Accepted Answer

A) Assisted demanding living 
B) Activities of daily living 
C) Associated disconnected life events 
D) Assisted deconstructed learning 
A) Assisted demanding living 
B) Activities of daily living 
C) Associated disconnected life events 
D) Assisted deconstructed learning

Question 12

Wayne and Sarah are trying to manage the risk they face in life a best as they can.They are following Principle 7 which states

Accepted Answer

A) the best protection is knowledge. 
B) protect yourself against major catastrophes. 
C) nothing happens without a plan. 
D) diversification reduces risk. 
E) the best insurance is prevention. 
A) the best protection is knowledge. 
B) protect yourself against major catastrophes. 
C) nothing happens without a plan. 
D) diversification reduces risk. 
E) the best insurance is prevention.

Question 13

With the needs approach,you should take into consideration any additional insurance policies that have been taken out on your life.

Accepted Answer

A) True 
 B)False

Question 14

Life insurance buying is a new experience for many people.Which of the following is not a basic consideration when determining life insurance needs?

Accepted Answer

A) Whether or not you need life insurance at this time 
B) The amount of coverage you need now and in the future 
C) The settlement options 
D) The type of life insurance that fits your needs 
E) Shopping around for the best agent and price 
A) Whether or not you need life insurance at this time 
B) The amount of coverage you need now and in the future 
C) The settlement options 
D) The type of life insurance that fits your needs 
E) Shopping around for the best agent and price

Question 15

Most major health care policies cover hospital,surgical,and physician coverages.

Accepted Answer

A) True 
 B)False

Question 16

What are the main features of whole life insurance?

Accepted Answer

A) The premiums stay constant for your entire life. 
B) The nonforfeiture right allows you access to the cash value account if needed. 
C) It provides your with permanent insurance regardless of age and health issues. 
D) All of the above are correct. 
E) All but B are correct. 
A) The premiums stay constant for your entire life. 
B) The nonforfeiture right allows you access to the cash value account if needed. 
C) It provides your with permanent insurance regardless of age and health issues. 
D) All of the above are correct. 
E) All but B are correct.

Question 17

With some disability income policies,you may receive partial benefits if you are able to return to work with a part-time schedule.

Accepted Answer

A) True 
 B)False

Question 18

Sally Heath has the option of obtaining life insurance through her place of employment.She will not need to take a physical exam.This type of policy would be a/an ________ policy.

Accepted Answer

A) universal life 
B) employer's life 
C) renewable term life 
D) group term life 
E) intermediate term life 
A) universal life 
B) employer's life 
C) renewable term life 
D) group term life 
E) intermediate term life

Question 19

________ is insurance that provides permanent insurance coverage as whole life does;however the policyholder,not the insurance company,takes on the investment risk.

Accepted Answer

A) Variable life insurance 
B) Universal life insurance 
C) Convertible life insurance 
D) None of the above 
A) Variable life insurance 
B) Universal life insurance 
C) Convertible life insurance 
D) None of the above

Question 20

With COBRA coverage,the employer pays the premiums.

Accepted Answer

A) True 
 B)False

If you have a good comprehensive health care policy,paying extra for disability income coverage is not a good use of your scarce insurance budget.

Life insurance and health insurance are designed to transfer the catastrophic risk you can't afford to keep onto the insurance companies.

Briefly explain the four common settlement options.

Special provisions that may be added to your policy which either provide extra benefits to the beneficiary or limit the company's liability under certain conditions are known as

Which of the following term plans is intended to cover an individual's outstanding debt?

You might consider another insurance agent if your agent uses the ________ method to analyze the costs of a policy.

Using the needs approach to determine the amount of coverage looks from the perspective of the

Why is being the policy owner so important?

The Health Insurance Marketplace is a new way for people to buy health insurance.To make plans easier to compare,the website presents plans in five categories with varying levels of cost-sharing.Which of the following plans is not offered?

Most long-term care policies require that you be unable to perform at least two ADL's.What are ADL's

Wayne and Sarah are trying to manage the risk they face in life a best as they can.They are following Principle 7 which states

With the needs approach,you should take into consideration any additional insurance policies that have been taken out on your life.

Life insurance buying is a new experience for many people.Which of the following is not a basic consideration when determining life insurance needs?

Most major health care policies cover hospital,surgical,and physician coverages.

What are the main features of whole life insurance?

With some disability income policies,you may receive partial benefits if you are able to return to work with a part-time schedule.

Sally Heath has the option of obtaining life insurance through her place of employment.She will not need to take a physical exam.This type of policy would be a/an ________ policy.

________ is insurance that provides permanent insurance coverage as whole life does;however the policyholder,not the insurance company,takes on the investment risk.

With COBRA coverage,the employer pays the premiums.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters

Exam 9: Life and Health Insurance

If you have a good comprehensive health care policy,paying extra for disability income coverage is not a good use of your scarce insurance budget.

Life insurance and health insurance are designed to transfer the catastrophic risk you can't afford to keep onto the insurance companies.

Briefly explain the four common settlement options.

Special provisions that may be added to your policy which either provide extra benefits to the beneficiary or limit the company's liability under certain conditions are known as

Which of the following term plans is intended to cover an individual's outstanding debt?

You might consider another insurance agent if your agent uses the ________ method to analyze the costs of a policy.

Using the needs approach to determine the amount of coverage looks from the perspective of the

Why is being the policy owner so important?

The Health Insurance Marketplace is a new way for people to buy health insurance.To make plans easier to compare,the website presents plans in five categories with varying levels of cost-sharing.Which of the following plans is not offered?

Most long-term care policies require that you be unable to perform at least two ADL's.What are ADL's

Wayne and Sarah are trying to manage the risk they face in life a best as they can.They are following Principle 7 which states

With the needs approach,you should take into consideration any additional insurance policies that have been taken out on your life.

Life insurance buying is a new experience for many people.Which of the following is not a basic consideration when determining life insurance needs?

Most major health care policies cover hospital,surgical,and physician coverages.

What are the main features of whole life insurance?

With some disability income policies,you may receive partial benefits if you are able to return to work with a part-time schedule.

Sally Heath has the option of obtaining life insurance through her place of employment.She will not need to take a physical exam.This type of policy would be a/an ________ policy.

________ is insurance that provides permanent insurance coverage as whole life does;however the policyholder,not the insurance company,takes on the investment risk.

With COBRA coverage,the employer pays the premiums.

The Financial Planning Process

Measuring Your Financial Health and Making a Plan

Understanding and Appreciating the Time Value of Money

Tax Planning and Strategies

Cash or Liquid Asset Management

Using Credit Cards: the Role of Open Credit

Student and Consumer Loans: the Role of Planned Borrowing

The Home and Automobile Decision

Property and Liability Insurance

Investment Basics

Investing in Stocks

Investing in Bonds and Other Alternatives

Mutual Funds: an Easy Way to Diversify

Retirement Planning

Estate Planning: Saving Your Heirs Money and Headaches

Financial Life Eventsfitting the Pieces Together

Filters