Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Your life insurance policy is valuable only if it:

Accepted Answer

A)  meets your objectives.
B)  makes you rich.
C)  makes your beneficiaries rich.
D)  serves as collateral for a loan.
E)  pays you at least 7.5 percent interest.F) C) and D)
G) B) and E)

Question 3

Fundamentally,group insurance is ____________ insurance.

Accepted Answer

A)  term
B)  whole life
C)  ordinary life
D)  permanent
E)  universal lifeF) D) and E)
G) All of the above

Question 4

In planning your insurance program,you should:

Accepted Answer

A)  seek advice from a competent financial adviser.
B)  determine what insurance is required.
C)  consider Social Security and other group insurance.
D)  decide what type of insurance best meets your needs.
E)  consider all of the factors listed in the other answers.F) C) and D)
G) B) and E)

Question 5

A two-earner couple likely will have:

Accepted Answer

A)  the greatest need for life insurance.
B)  no need for life insurance.
C)  a moderate need for life insurance,especially if they have a mortgage.
D)  the greatest need for an annuity.
E)  the exact same life insurance needs as all other two-earner couples.F) A) and B)
G) A) and C)

Question 6

The most common type of permanent life insurance is called:

Accepted Answer

A)  whole life.
B)  term life.
C)  universal life.
D)  modified life.
E)  variable lifE.F) A) and E)
G) C) and E)

Question 7

Because the premium payment period for a limited payment policy is shorter than that of a whole life policy,the annual premium is higher.

Accepted Answer

A) True 
 B)False

Question 8

Single persons living alone have little or no need for life insurance.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following names refer to permanent insurance?

Accepted Answer

A)  whole life
B)  straight life
C)  ordinary life
D)  cash-value life
E)  all of the names listed in the other answersF) C) and D)
G) A) and B)

Question 11

Insurance experts have estimated that extra costs of up to $_____________ a year may be required to replace the services of a homemaker in a family with small children.

Accepted Answer

A)  3,000
B)  6,000
C)  10,000
D)  12,000
E)  15,000F) A) and D)
G) None of the above

Question 12

When you purchase a variable life policy,the insurance company assumes the risk of poor investment performance.

Accepted Answer

A) True 
 B)False

Question 13

The cash values of a(an) ____________ life insurance policy fluctuate according to the yields earned by a separate fund,which can be a stock fund,a money market fund,or a long-term fund.

Accepted Answer

A)  modified
B)  variable
C)  adjustable
D)  ordinary
E)  temporaryF) B) and E)
G) None of the above

Question 14

The insurance industry rule of thumb that a typical family will need 70% of salary for seven years in order to adjust for the financial consequences of a salary earner's death is known as which of the following estimation methods?

Accepted Answer

A)  nonworking spouse
B)  easy method
C)  DINK method
D)  family need
E)  soccer momF) B) and E)
G) C) and D)

Question 15

Which one of the following statements correctly applies to term insurance?

Accepted Answer

A)  The premiums remain constant.
B)  The policy builds cash value.
C)  Protection is for a specified period of time.
D)  It usually is more expensive than whole life insurance.
E)  The investment performance varies with the stock market.F) B) and C)
G) A) and C)

Question 16

Some experts claim that credit life insurance policies are:

Accepted Answer

A)  the nation's biggest rip off.
B)  the best buys.
C)  useful for creditors and debtors alike.
D)  less expensive than term life insurance.
E)  an excellent investment.F) A) and C)
G) A) and B)

Question 17

Who is likely to have the least need for life insurance?

Accepted Answer

A)  married couple,only one spouse working,with three small children
B)  single person living with parents
C)  married couple with solid jobs and no dependents
D)  married working couple with one child
E)  single person about to be marriedF) B) and D)
G) A) and D)

Question 18

Universal life is a whole life policy that combines term insurance and investment elements.

Accepted Answer

A) True 
 B)False

Question 19

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

Accepted Answer

In determining your life insurance needs...

Question 20

Universal life,variable life,and adjustable life are types of term life insurance.

Accepted Answer

A) True 
 B)False

Exam 12: Life Insurance

Your life insurance policy is valuable only if it:

Correct AnswerverifiedShow Answer

A two-earner couple likely will have:

Correct AnswerverifiedShow Answer

Single persons living alone have little or no need for life insurance.

Correct AnswerverifiedShow Answer

Universal life is a whole life policy that combines term insurance and investment elements.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Universal life,variable life,and adjustable life are types of term life insurance.

Correct AnswerverifiedShow Answer

Who is likely to have the least need for life insurance?

Correct AnswerverifiedShow Answer

The cash values of a(an) ____________ life insurance policy fluctuate according to the yields earned by a separate fund,which can be a stock fund,a money market fund,or a long-term fund.

Correct AnswerverifiedShow Answer

The most common type of permanent life insurance is called:

Correct AnswerverifiedShow Answer

Insurance experts have estimated that extra costs of up to $_____________ a year may be required to replace the services of a homemaker in a family with small children.

Correct AnswerverifiedShow Answer

Some experts claim that credit life insurance policies are:

Correct AnswerverifiedShow Answer

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

Correct AnswerverifiedIn determining your life insurance needs...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Because the premium payment period for a limited payment policy is shorter than that of a whole life policy,the annual premium is higher.

Correct AnswerverifiedShow Answer

The insurance industry rule of thumb that a typical family will need 70% of salary for seven years in order to adjust for the financial consequences of a salary earner's death is known as which of the following estimation methods?

Correct AnswerverifiedShow Answer

Which one of the following statements correctly applies to term insurance?

Correct AnswerverifiedShow Answer

In planning your insurance program,you should:

Correct AnswerverifiedShow Answer

When you purchase a variable life policy,the insurance company assumes the risk of poor investment performance.

Correct AnswerverifiedShow Answer

Which of the following names refer to permanent insurance?

Correct AnswerverifiedShow Answer

Fundamentally,group insurance is ____________ insurance.

Correct AnswerverifiedShow Answer

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In determining your life insurance needs...
View Answer

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