Question 1

Even though it is expensive,you should add the accidental death benefit to your life insurance policy,because your chances of dying in the exact manner stated in the policy are very high.

Accepted Answer

A) True 
 B)False

Question 2

Which statement is correct about whole life insurance?

Accepted Answer

A)  At first, it is cheaper than term life.
B)  It builds up cash value.
C)  The premiums increase with your age.
D)  It is the best choice for people who plan to keep the policy for a short term.
E)  It is the same thing as term life insurance.F) D) and E)
G) A) and B)

Question 3

Most American families face a substantial loss when one spouse dies unexpectedly.

Accepted Answer

A) True 
 B)False

Question 4

The coverage of term insurance ends at the conclusion of the term,but you can continue it if you have a renewability option.

Accepted Answer

A) True 
 B)False

Question 5

After you buy new life insurance,you have a "free look" period of ______ days.

Accepted Answer

A)  10
B)  20
C)  30
D)  40
E)  50F) A) and B)
G) A) and C)

Question 6

The prices of life insurance policies:

Accepted Answer

A)  vary considerably among life insurance companies.
B)  are relatively the same for all policies.
C)  are higher for females than males.
D)  have remained constant over time.
E)  are set by the government here in the United States.F) A) and D)
G) A) and E)

Question 7

Using the "nonworking" spouse method,what should be the life insurance need for a family whose youngest child is 10 years old?

Accepted Answer

A)  $30,000
B)  $50,000
C)  $80,000
D)  $100,000
E)  $180,000F) A) and C)
G) A) and B)

Question 8

After determining you need life insurance,you should then:

Accepted Answer

A)  consult a local insurance company agent.
B)  buy as much life insurance as you can afford.
C)  estimate your life insurance requirements.
D)  determine your life insurance objectives.
E)  evaluate the ratings of the insurance company.F) A) and E)
G) D) and E)

Question 9

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

Accepted Answer

A)  double
B)  simple
C)  single
D)  compound
E)  equitableF) All of the above
G) C) and E)

Question 10

Fundamentally,group insurance is ____________ insurance.

Accepted Answer

A)  term
B)  whole life
C)  ordinary life
D)  permanent
E)  universal lifeF) None of the above
G) A) and E)

Question 11

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the major rating agencies.

Accepted Answer

A) True 
 B)False

Question 12

Two-earner couples may have a moderate need for life insurance,especially if they have a mortgage or other large debts.

Accepted Answer

A) True 
 B)False

Question 13

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65.His policy is then 'paid up' for life.His beneficiaries will receive the face value upon his death.What type of life insurance policy does Tim likely have?

Accepted Answer

A)  Ordinary life
B)  Limited payment
C)  Variable life
D)  Adjustable life
E)  Universal lifeF) B) and E)
G) D) and E)

Question 14

The DINK method of determining life insurance needs assumes that your spouse will continue to work after your death.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

How many different types of life insurance companies are there?

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5F) C) and D)
G) B) and D)

Question 17

Jerry Lewis is thinking about purchasing some life insurance.He goes to a company that is owned by shareholders.What type of life insurance company has he visited?

Accepted Answer

A)  Stock
B)  Debt
C)  Mutual
D)  Exclusionary
E)  CooperativeF) B) and C)
G) A) and B)

Question 18

Decreasing term life insurance is no longer available.

Accepted Answer

A) True 
 B)False

Question 19

Which type of life insurance is the least popular and its appeal continues to drop?

Accepted Answer

A)  Endowment life insurance
B)  Credit life insurance
C)  Group life insurance
D)  Industrial life insurance
E)  Universal life insuranceF) A) and D)
G) A) and C)

Question 20

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Accepted Answer

A) True 
 B)False

Exam 12: Life Insurance

Decreasing term life insurance is no longer available.

Correct AnswerverifiedShow Answer

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65.His policy is then 'paid up' for life.His beneficiaries will receive the face value upon his death.What type of life insurance policy does Tim likely have?

Correct AnswerverifiedShow Answer

How many different types of life insurance companies are there?

Correct AnswerverifiedShow Answer

The DINK method of determining life insurance needs assumes that your spouse will continue to work after your death.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most American families face a substantial loss when one spouse dies unexpectedly.

Correct AnswerverifiedShow Answer

Jerry Lewis is thinking about purchasing some life insurance.He goes to a company that is owned by shareholders.What type of life insurance company has he visited?

Correct AnswerverifiedShow Answer

Two-earner couples may have a moderate need for life insurance,especially if they have a mortgage or other large debts.

Correct AnswerverifiedShow Answer

After determining you need life insurance,you should then:

Correct AnswerverifiedShow Answer

Which type of life insurance is the least popular and its appeal continues to drop?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When buying life insurance,as a rule,you should deal with companies rated superior or excellent by the major rating agencies.

Correct AnswerverifiedShow Answer

Using the "nonworking" spouse method,what should be the life insurance need for a family whose youngest child is 10 years old?

Correct AnswerverifiedShow Answer

Even though it is expensive,you should add the accidental death benefit to your life insurance policy,because your chances of dying in the exact manner stated in the policy are very high.

Correct AnswerverifiedShow Answer

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Correct AnswerverifiedShow Answer

After you buy new life insurance,you have a "free look" period of ______ days.

Correct AnswerverifiedShow Answer

Fundamentally,group insurance is ____________ insurance.

Correct AnswerverifiedShow Answer

Which statement is correct about whole life insurance?

Correct AnswerverifiedShow Answer

The prices of life insurance policies:

Correct AnswerverifiedShow Answer

The coverage of term insurance ends at the conclusion of the term,but you can continue it if you have a renewability option.

Correct AnswerverifiedShow Answer

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