Question 1

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Accepted Answer

A)  $310,000
B)  $441,000
C)  $630,000
D)  $1,000,000
E)  $1,200,000F) D) and E)
G) B) and D)

Question 2

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 B)
G) B) and E)

Question 3

The insurance agent's rule of thumb that a typical family will need 70% of salary for seven years in order to adjust to the financial consequences of a wage-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) C) and E)
G) C) and D)

Question 4

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Accepted Answer

A)  Straight
B)  Renewable
C)  Convertible
D)  Decreasing
E)  AcceleratedF) A) and D)
G) A) and E)

Question 5

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

Accepted Answer

A)  double
B)  simple
C)  single
D)  compound
E)  equitableF) B) and C)
G) A) and B)

Question 6

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 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

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) C) and D)
G) A) and E)

Question 10

The total debts of you and your spouse include the following: mortgage,$200,000; auto loan,$16,000; credit card balance,$2,000; and personal debts of $4,000.Further,you estimate that your funeral will cost $6,000.Your spouse expects to continue to work after your death.What is your life insurance need using the DINK method?

Accepted Answer

A)  $117,000
B)  $120,000
C)  $200,000
D)  $216,000
E)  $222,000F) A) and B)
G) A) and C)

Question 11

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) All of the above
G) A) and B)

Question 12

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Accepted Answer

A) True 
 B)False

Question 13

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) A) and E)
G) None of the above

Question 14

Life insurance proceeds may be used to:

Accepted Answer

A)  pay off a home mortgage.
B)  cover funeral costs.
C)  make charitable bequests.
D)  pay estate taxes.
E)  All of theseF) C) and D)
G) A) and D)

Question 15

Cash-value policies may make sense for people who:

Accepted Answer

A)  intend to keep the policies for only a couple of years.
B)  are able to save easily.
C)  must be forced to save.
D)  need to accumulate reserves in a few years.
E)  need benefits in the early years.F) All of the above
G) D) and E)

Question 16

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

Exam 12: Life Insurance

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

Correct Answer
verified

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

Correct Answer
verified

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Correct Answer
verified

The most common type of permanent life insurance is called:

Correct Answer
verified

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 Answer
verified

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Correct Answer
verified

Your life insurance policy is valuable only if it:

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Life insurance proceeds may be used to:

Correct Answer
verified

Cash-value policies may make sense for people who:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Correct Answer
verified

Exam 12: Life Insurance

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

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

Your annual income is $90,000.You have a spouse,two kids,a dog and a mortgage - a typical family.What is your life insurance need based on the easy method?

Correct AnswerverifiedShow Answer

The most common type of permanent life insurance is called:

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

Under the waiver of premium disability benefit provision,the company waives any premiums that are due after the onset of total and permanent disability.

Correct AnswerverifiedShow Answer

Your life insurance policy is valuable only if it:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Life insurance proceeds may be used to:

Correct AnswerverifiedShow Answer

Cash-value policies may make sense for people who:

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

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Renee Wilson has a life insurance policy where the payments to beneficiaries get smaller as time passes.What type of term life insurance does Renee likely have?

Correct AnswerverifiedShow Answer

Correct Answer
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