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Exam 12: Life Insurance

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Question 71

Multiple Choice

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Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount,subject to certain minimums.What type of insurance does Russell likely have?

A) ordinary whole life
B) limited payment life
C) variable life
D) adjustable life
E) universal life

F) A) and D)
G) B) and D)

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Question 72

True/False

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Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

A) True
B) False

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Question 73

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A special form of the limited payment plan is the single-premium policy.In this type of contract,you make only one very large premium payment.

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

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

Catherine Carey has made the choice to stay home and raise her three kids while her husband works.She wants to determine her insurance need.What method was specifically designed for someone in her situation?

Lori Simpson is thinking about purchasing some life insurance.She goes to a company where the policyholders are essentially the owners of the company.What type of life insurance company has she visited?

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

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Nearly all mutual companies issue only nonparticipating policies.

An annuity is a financial contract written by an insurance company to provide you with a regular income.

A fixed annuity is a plan under which the monthly payments vary.

Lisa Smith has her age listed on her driver's license as being three years younger than it actually is.This is also how old she tells her insurance company she is.Her insurance company has discovered she lied about her age.What provision of her life insurance contract states that her benefits will be what her premium would have bought if she had been truthful about her age?

When compared with Universal Life policies and Whole Life policies,which of the following is typically an advantage of a Term Life policy?

Life insurance proceeds may be used to provide an education or income for children.

Term insurance is protection for a specified period of time,usually 1,5,10,or 20 years.

The cash values of a variable life insurance policy increase at a constant rate over time.

Which of the following is (are) false?

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Most life insurance companies are mutuals.