Question 1

If the policy owner decides to terminate the policy prior to death,the cash value can be used in a variety of ways.What is this called?

Accepted Answer

A) Non-forfeiture options 
B) Cash value options 
C) Participating options 
D) Settlement options 
A) Non-forfeiture options 
B) Cash value options 
C) Participating options 
D) Settlement options

Question 2

Which of the following is true about the chances of becoming disabled?

Accepted Answer

A) The probability of a 35-year-old becoming disabled for three months or longer before they reach age 65 is around 25 percent. 
B) Because the chance of becoming disabled is small,most people do not need disability insurance coverage. 
C) Disability insurance is a good thing to have even if you have a low probability of becoming disabled. 
D) The probability of a 50-year-old becoming disabled for three months or longer before they reach age 65 is around 50 percent. 
A) The probability of a 35-year-old becoming disabled for three months or longer before they reach age 65 is around 25 percent. 
B) Because the chance of becoming disabled is small,most people do not need disability insurance coverage. 
C) Disability insurance is a good thing to have even if you have a low probability of becoming disabled. 
D) The probability of a 50-year-old becoming disabled for three months or longer before they reach age 65 is around 50 percent.

Question 3

A rider is an option that allows you to customize an insurance policy,such as by adding term insurance for a child.

Accepted Answer

A) True 
 B)False

Question 4

Jenny has no dependants,an annual income of $50 000,and debt of $100000 .How much insurance should she buy using the income method and a factor of 10?

Accepted Answer

A) none 
B) $100 000 
C) $400 000 
D) $500 000 
A) none 
B) $100 000 
C) $400 000 
D) $500 000

Question 5

Your most important asset is your ability to earn income.

Accepted Answer

A) True 
 B)False

Question 6

Non-forfeiture options allow you to re-instate your term insurance if you lapse the policy accidentally and have no medical conditions.

Accepted Answer

A) True 
 B)False

Question 7

Jane and Joe each earn $55 000 and have estimated that over the next 20 years will need 60 percent of total income to manage debt,pay off the mortgage,and pay for children's postsecondary education.How much life insurance should they apply for? (Investment returns are 6 percent.)

Accepted Answer

A) $587 000 
B) $1 320 000 
C) $843 000 
D) $757 000 
A) $587 000 
B) $1 320 000 
C) $843 000 
D) $757 000

Question 8

If used properly,term life insurance can be an effective estate planning tool.

Accepted Answer

A) True 
 B)False

Question 9

The major underwriting factors of life insurance are age,sex,smoking status,driving record,and other health and lifestyle considerations.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not an important consideration from the employee's perspective regarding group benefits plans?

Accepted Answer

A) Saving money on premiums for insurance 
B) Coverage for employees who are uninsurable 
C) Protection on top of government plans 
D) Improving staff retention 
A) Saving money on premiums for insurance 
B) Coverage for employees who are uninsurable 
C) Protection on top of government plans 
D) Improving staff retention

Question 11

The beneficiary of a life insurance policy is

Accepted Answer

A) the owner of the policy. 
B) the one who pays the premiums. 
C) the life insured. 
D) the one who receives the settlement option. 
A) the owner of the policy. 
B) the one who pays the premiums. 
C) the life insured. 
D) the one who receives the settlement option.

Question 12

When calculating the amount of life insurance premiums,underwriters of life insurance would not be concerned with

Accepted Answer

A) the amount of coverage you desire. 
B) your age when you take out the policy. 
C) your health habits. 
D) the length of time you plan to keep the coverage. 
A) the amount of coverage you desire. 
B) your age when you take out the policy. 
C) your health habits. 
D) the length of time you plan to keep the coverage.

Question 13

Which of the following is true regarding policy dividends from insurance?

Accepted Answer

A) They only apply to Universal Life policies. 
B) They are investment distributions. 
C) They only apply to participating policies. 
D) They are taxable profits to shareholders. 
A) They only apply to Universal Life policies. 
B) They are investment distributions. 
C) They only apply to participating policies. 
D) They are taxable profits to shareholders.

Question 14

Sam's annual income is $60 000 and Jane is staying home looking after their children.If Sam died,they figure it would take $350000 invested at four percent to provide suitable income for the family for 15 years until the kids are more independent.They would also like to have $40000 set aside for university for his two children.Sam and Jane's total RRSP savings are $120000 .How much life insurance does he need using the budget method?

Accepted Answer

A) $270 000 
B) $350 000 
C) $390 000 
D) $500 000 
A) $270 000 
B) $350 000 
C) $390 000 
D) $500 000

Question 15

Which of the following is true about the cost of health care in Canada?

Accepted Answer

A) The supplementary health care benefits funded by the provinces vary across the country. 
B) The federal government administers all Canadian health care through the Canada Health Act. 
C) Health care costs as a portion of revenue are growing minimally over time. 
D) Approximately half the funding for health care comes from private health care plans. 
A) The supplementary health care benefits funded by the provinces vary across the country. 
B) The federal government administers all Canadian health care through the Canada Health Act. 
C) Health care costs as a portion of revenue are growing minimally over time. 
D) Approximately half the funding for health care comes from private health care plans.

Question 16

Which is true in comparing universal life (UL)insurance and whole life (WL)insurance?

Accepted Answer

A) With WL the cash value is not guaranteed. 
B) With UL you will likely receive policy dividends. 
C) With WL the premiums are flexible. 
D) With UL the premiums are flexible. 
A) With WL the cash value is not guaranteed. 
B) With UL you will likely receive policy dividends. 
C) With WL the premiums are flexible. 
D) With UL the premiums are flexible.

Question 17

If John's business had purchased disability insurance coverage for its employees which was guaranteed renewable,which of the following is true?

Accepted Answer

A) The insurance company must renew the coverage with same benefits and premiums at the renewal date. 
B) The employer must renew the same benefits each year,even if the premiums increase. 
C) The insurance company must renew the coverage with the same benefits but could increase the premiums. 
D) The insurance company must renew the coverage,but could change the definition of disability used. 
A) The insurance company must renew the coverage with same benefits and premiums at the renewal date. 
B) The employer must renew the same benefits each year,even if the premiums increase. 
C) The insurance company must renew the coverage with the same benefits but could increase the premiums. 
D) The insurance company must renew the coverage,but could change the definition of disability used.

Question 18

Critical illness insurance covers any life threatening illness as long as you live for at least 30 days following the diagnosis.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is most correct about the guaranteed renewable clause in an insurance policy?

Accepted Answer

A) It guarantees you can renew your insurance up to a certain age. 
B) It guarantees you can renew your insurance up to a certain age without an increase in premiums. 
C) It guarantees you can renew your mortgage insurance at the end of the term. 
D) It guarantees you can renew your disability insurance at the same premium rate. 
A) It guarantees you can renew your insurance up to a certain age. 
B) It guarantees you can renew your insurance up to a certain age without an increase in premiums. 
C) It guarantees you can renew your mortgage insurance at the end of the term. 
D) It guarantees you can renew your disability insurance at the same premium rate.

Question 20

Which of the following factors is most important in determining your life insurance premium rate?

Accepted Answer

A) Your profession 
B) Your health 
C) Your net worth 
D) The amount of coverage 
A) Your profession 
B) Your health 
C) Your net worth 
D) The amount of coverage

If the policy owner decides to terminate the policy prior to death,the cash value can be used in a variety of ways.What is this called?

Which of the following is true about the chances of becoming disabled?

A rider is an option that allows you to customize an insurance policy,such as by adding term insurance for a child.

Jenny has no dependants,an annual income of $50 000,and debt of $100000 .How much insurance should she buy using the income method and a factor of 10?

Your most important asset is your ability to earn income.

Non-forfeiture options allow you to re-instate your term insurance if you lapse the policy accidentally and have no medical conditions.

Jane and Joe each earn $55 000 and have estimated that over the next 20 years will need 60 percent of total income to manage debt,pay off the mortgage,and pay for children's postsecondary education.How much life insurance should they apply for? (Investment returns are 6 percent.)

If used properly,term life insurance can be an effective estate planning tool.

The major underwriting factors of life insurance are age,sex,smoking status,driving record,and other health and lifestyle considerations.

Which of the following is not an important consideration from the employee's perspective regarding group benefits plans?

The beneficiary of a life insurance policy is

When calculating the amount of life insurance premiums,underwriters of life insurance would not be concerned with

Which of the following is true regarding policy dividends from insurance?

Which of the following is true about the cost of health care in Canada?

Which is true in comparing universal life (UL)insurance and whole life (WL)insurance?

If John's business had purchased disability insurance coverage for its employees which was guaranteed renewable,which of the following is true?

Critical illness insurance covers any life threatening illness as long as you live for at least 30 days following the diagnosis.

Which of the following is most correct about the guaranteed renewable clause in an insurance policy?

Which of the following factors is most important in determining your life insurance premium rate?

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

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Exam 3: Protecting Your Wealth - Health and Life Insurance

If the policy owner decides to terminate the policy prior to death,the cash value can be used in a variety of ways.What is this called?

Which of the following is true about the chances of becoming disabled?

A rider is an option that allows you to customize an insurance policy,such as by adding term insurance for a child.

Jenny has no dependants,an annual income of $50 000,and debt of $100000 .How much insurance should she buy using the income method and a factor of 10?

Your most important asset is your ability to earn income.

Non-forfeiture options allow you to re-instate your term insurance if you lapse the policy accidentally and have no medical conditions.

Jane and Joe each earn $55 000 and have estimated that over the next 20 years will need 60 percent of total income to manage debt,pay off the mortgage,and pay for children's postsecondary education.How much life insurance should they apply for? (Investment returns are 6 percent.)

If used properly,term life insurance can be an effective estate planning tool.

The major underwriting factors of life insurance are age,sex,smoking status,driving record,and other health and lifestyle considerations.

Which of the following is not an important consideration from the employee's perspective regarding group benefits plans?

The beneficiary of a life insurance policy is

When calculating the amount of life insurance premiums,underwriters of life insurance would not be concerned with

Which of the following is true regarding policy dividends from insurance?

Which of the following is true about the cost of health care in Canada?

Which is true in comparing universal life (UL)insurance and whole life (WL)insurance?

If John's business had purchased disability insurance coverage for its employees which was guaranteed renewable,which of the following is true?

Critical illness insurance covers any life threatening illness as long as you live for at least 30 days following the diagnosis.

Which of the following is most correct about the guaranteed renewable clause in an insurance policy?

Which of the following factors is most important in determining your life insurance premium rate?

Tools for Financial Planning - Applying Time Value Concepts

Tools for Financial Planning - Planning with Personal Financial Statements

Tools for Financial Planning - Using Tax Concepts for Planning

Managing Your Financial Resources - Banking Services and Managing Your Money

Managing Your Financial Resources - Assessing,Managing and Securing Your Credit

Managing Your Financial Resources - Purchasing and Financing a Home

Protecting Your Wealth - Auto and Homeowner's Insurance

Personal Investing - Investing Fundamentals

Personal Investing - Investing in Stocks

Personal Investing - Investing in Bonds

Personal Investing - Investing in Mutual Funds

Retirement and Estate Planning - Retirement Planning

Retirement and Estate Planning - Estate Planning

Synthesis of Financial Planning - Integrating the Components of a Financial Plan

Filters