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Exam 12: Life Insurance

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Question 31

True/False

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Credit life insurance is used to repay a personal debt should the borrower die before doing so.

A) True
B) False

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Question 32

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Term life insurance premiums decrease as you get older.

A) True
B) False

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Question 33

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Jeff Willis has five kids and more debt than the average family. What method would probably be the best method for him to use to calculate his insurance needs?

Which type of life insurance policy combines term insurance and investment elements?

Your first step in determining a life insurance program should be to:

Although it is impossible to put a price on the life of an insured person, most adults probably are covered by some life insurance.

Life insurance proceeds may provide a retirement income.

The most common type of permanent life insurance is the whole life policy.

Which statement is correct regarding mutual insurance companies?

Under the life income option, payments are made to the beneficiary for as long as he or she lives.

Which type of life insurance policy provides coverage from the beginning of the contract to maturity and guarantees payment of a specified sum to the insured, even if he or she is still living at the end of the contract period?

A rider is any document attached to the policy that modifies its coverage by adding or excluding specified conditions or altering its benefits.

Shelley Jackson has a life insurance policy where she makes payments of $185 per year for the rest of her life. This policy has a cash value that increases while she continues to make payments. If she gives up her insurance, the cash value is the amount she would receive from this policy. What type of life insurance does Shelley likely have?

Jim Brown has a life insurance policy that allows him to change his policy to fit his changing needs. He can change either the premium he pays or the period of coverage. What type of insurance does Jim likely have?

Even though it is expensive, you should add the accidental death benefit to any life insurance policy you purchase.

Industrial life insurance is the most popular form of insurance today.

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Accelerated benefits are life insurance policy proceeds paid to the policyholder who is terminally ill before he or she dies.

A special form of the limited payment plan is the ____________ premium policy.

The incontestability clause stipulates that the insurance company can dispute the validity of the policy anytime during the insured's lifetime.