Question 1

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 single persons living alone.F) C) and E)
G) None of the above

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) B) and E)
G) A) and B)

Question 3

The grace period normally allows ____________ days to elapse,during which time the premium may be paid on an insurance policy without penalty.

Accepted Answer

A)  11 to 15
B)  16 to 21
C)  20 to 25
D)  28 to 31
E)  35 to 40F) A) and D)
G) D) and E)

Question 4

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about 70 percent of your salary for seven years.

Accepted Answer

A) True 
 B)False

Question 5

If your death would cause financial stress for your spouse or children,you should consider purchasing life insurance.

Accepted Answer

A) True 
 B)False

Question 6

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) All of the above
G) None of the above

Question 7

Scott Cumbie wants to determine his life insurance need.What method would identify his insurance needs as a range between five and eight times his income?

Accepted Answer

A)  Multiple of income method
B)  DINK method
C)  Nonworking spouse method
D)  'Family need' method
E)  Sample methodF) C) and E)
G) B) and E)

Question 8

The method of determining life insurance requirements that considers factors such as Social Security and your liquid assets is called the:

Accepted Answer

A)  easy method.
B)  single-income method.
C)  DINK method.
D)  "nonworking" spouse method.
E)  "family need" method.F) B) and E)
G) B) and C)

Question 9

The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

A) True 
 B)False

Question 11

An important provision in every life insurance policy is the right to name your beneficiary.

Accepted Answer

A) True 
 B)False

Question 12

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?

Accepted Answer

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

Question 13

The 2001 CSO Table separates the mortality experience by:

Accepted Answer

A)  age.
B)  income level.
C)  occupation.
D)  domicile.
E)  gender.F) B) and E)
G) None of the above

Question 14

A beneficiary can be a spouse or child who:

Accepted Answer

A)  acts as a trustee of your insurance policy.
B)  is a guardian of your children.
C)  acts on your behalf.
D)  is designated to receive your life insurance proceeds.
E)  acts as an agent handling your insurance policy.F) C) and D)
G) A) and E)

Question 15

Life insurance proceeds may be used to provide a retirement income.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Which of the following does not refer to permanent insurance?

Accepted Answer

A)  Whole life
B)  Straight life
C)  Ordinary life
D)  Cash-value life
E)  Term life.F) A) and B)
G) A) and C)

Question 18

The second-to-die option is paid when the first spouse dies.

Accepted Answer

A) True 
 B)False

Question 19

One important feature of a whole life policy is the nonforfeiture clause,which prevents the forfeiture of accrued benefits if you choose to drop the policy.

Accepted Answer

A) True 
 B)False

Question 20

The DINK method of determining life insurance needs recommends adding an additional insurance cushion if your spouse is:

Accepted Answer

A)  heatlhy.
B)  employed in an occupation with a certain future.
C)  a non-working spouse.
D)  suffering from poor health.
E)  a senior citizen.F) A) and E)
G) A) and B)

Exam 12: Life Insurance

An important provision in every life insurance policy is the right to name your beneficiary.

Correct AnswerverifiedShow Answer

If your death would cause financial stress for your spouse or children,you should consider purchasing life insurance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The DINK method of determining life insurance needs recommends adding an additional insurance cushion if your spouse is:

Correct AnswerverifiedShow Answer

Your life insurance policy is valuable only if it:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about 70 percent of your salary for seven years.

Correct AnswerverifiedShow Answer

The method of determining life insurance requirements that considers factors such as Social Security and your liquid assets is called the:

Correct AnswerverifiedShow Answer

One important feature of a whole life policy is the nonforfeiture clause,which prevents the forfeiture of accrued benefits if you choose to drop the policy.

Correct AnswerverifiedShow Answer

The grace period normally allows ____________ days to elapse,during which time the premium may be paid on an insurance policy without penalty.

Correct AnswerverifiedShow Answer

A beneficiary can be a spouse or child who:

Correct AnswerverifiedShow Answer

The financial strength of an insurance company may be a major factor in holding down premium costs for consumers.

Correct AnswerverifiedShow Answer

The second-to-die option is paid when the first spouse dies.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

A two-earner couple likely will have:

Correct AnswerverifiedShow Answer

Scott Cumbie wants to determine his life insurance need.What method would identify his insurance needs as a range between five and eight times his income?

Correct AnswerverifiedShow Answer

The 2001 CSO Table separates the mortality experience by:

Correct AnswerverifiedShow Answer

Life insurance proceeds may be used to provide a retirement income.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following does not refer to permanent insurance?

Correct AnswerverifiedShow Answer

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