Question 1

A life insurance policy puts a price on the life of the insured person.

Accepted Answer

A) True 
 B)False

Question 2

The easy method of determining life insurance needs is based on the rule of thumb that a "typical family" will need about what percent of a wage-earner's salary for seven years?

Accepted Answer

A)  20
B)  40
C)  50
D)  70
E)  80F) A) and B)
G) B) and E)

Question 3

Jane Curtain has a participating life insurance policy that returns part of her premiums at the end of the year.What is another name for this policy?

Accepted Answer

A)  Cash Value
B)  Par
C)  Nonpar
D)  Rider
E)  Double IndemnityF) B) and E)
G) B) and D)

Question 4

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Accepted Answer

A) True 
 B)False

Question 5

Jim Brown has a life insurance policy that allows him to change his policy to fit his changing needs.He can change either the premium he pays or the period of coverage.What type of insurance does Jim likely have?

Accepted Answer

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

Question 6

If a provision for an accidental death benefit is attached to a whole life insurance policy,then this provision is referred to as a:

Accepted Answer

A)  rider.
B)  waiver of premium.
C)  automatic premium loan.
D)  beneficiary.
E)  incontestability clause.F) A) and E)
G) D) and E) A

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

With a variable life insurance policy,many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.

Accepted Answer

A) True 
 B)False

Question 9

A chartered life underwriter is a life insurance agent who has passed a series of college-level examinations on insurance and related subjects.

Accepted Answer

A) True 
 B)False

Question 10

Your annual income is $32,000.What is your life insurance need based on the easy method?

Accepted Answer

A)  $32,000
B)  $96,000
C)  $156,800
D)  $200,000
E)  $224,000F) B) and E)
G) B) and C) C

Question 11

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

Question 12

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 13

Which of the following statements is true about group life insurance?

Accepted Answer

A)  Group life has been losing its popularity recently.
B)  The cost of insurance per $1,000 is the same for each employee,regardless of age.
C)  Group insurance is not a good bargain for older employees.
D)  Principles that apply to other forms of insurance do not apply to group life insurance.
E)  Group life is never considered the same thing as term life insurance.F) D) and E)
G) B) and D)

Question 14

Explain how a guaranteed insurability option works and why it is beneficial.

Accepted Answer

This option allows you to buy specified ...

Question 15

Two basic types of life insurance are temporary and permanent insurance.

Accepted Answer

A) True 
 B)False  True

Question 16

A method of evaluating the cost of life insurance by taking into account the time value of money combines all of the following except:

Accepted Answer

A)  premium payments.
B)  dividends.
C)  supply and demand.
D)  cash-value buildup.
E)  present value analysis.F) B) and E)
G) A) and E)

Question 17

When choosing an insurance agent,what are some important questions to ask?

Accepted Answer

When selecting an insurance agent,some v...

Question 18

Life insurance is one of the most important and expensive purchases you may ever make.

Accepted Answer

A) True 
 B)False

Question 19

In creating a plan to buy your life insurance,what factors should you consider before buying? Also,describe from whom you should buy,including the sources.

Accepted Answer

Before buying life insurance,you should ...

Question 20

Richard Beck has a life insurance policy which he has modified to include an accidental death benefit payable to his son and daughter.This modification has most likely been done by attaching a(n) ________ to the policy.

Accepted Answer

A)  accelerated benefits clause
B)  policy dividend
C)  guaranteed insurability clause
D)  second-to-die rider
E)  double indemnity provisionF) A) and C)
G) None of the above

Exam 12: Life Insurance

A life insurance policy puts a price on the life of the insured person.

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 what percent of a wage-earner's salary for seven years?

Correct AnswerverifiedShow Answer

Jane Curtain has a participating life insurance policy that returns part of her premiums at the end of the year.What is another name for this policy?

Correct AnswerverifiedShow Answer

An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

Correct AnswerverifiedShow Answer

Jim Brown has a life insurance policy that allows him to change his policy to fit his changing needs.He can change either the premium he pays or the period of coverage.What type of insurance does Jim likely have?

Correct AnswerverifiedShow Answer

If a provision for an accidental death benefit is attached to a whole life insurance policy,then this provision is referred to as a:

Correct AnswerverifiedA

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

Correct AnswerverifiedShow Answer

With a variable life insurance policy,many people choose to supplement their retirement income by withdrawing some of the investment portion as an annuity to provide regular income.

Correct AnswerverifiedShow Answer

A chartered life underwriter is a life insurance agent who has passed a series of college-level examinations on insurance and related subjects.

Correct AnswerverifiedShow Answer

Your annual income is $32,000.What is your life insurance need based on the easy method?

Correct AnswerverifiedC

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

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

Which of the following statements is true about group life insurance?

Correct AnswerverifiedShow Answer

Explain how a guaranteed insurability option works and why it is beneficial.

Correct AnswerverifiedThis option allows you to buy specified ...View AnswerShow Answer

Two basic types of life insurance are temporary and permanent insurance.

Correct AnswerverifiedTrue

A method of evaluating the cost of life insurance by taking into account the time value of money combines all of the following except:

Correct AnswerverifiedShow Answer

When choosing an insurance agent,what are some important questions to ask?

Correct AnswerverifiedWhen selecting an insurance agent,some v...View AnswerShow Answer

Life insurance is one of the most important and expensive purchases you may ever make.

Correct AnswerverifiedShow Answer

In creating a plan to buy your life insurance,what factors should you consider before buying? Also,describe from whom you should buy,including the sources.

Correct AnswerverifiedBefore buying life insurance,you should ...View AnswerShow Answer

Richard Beck has a life insurance policy which he has modified to include an accidental death benefit payable to his son and daughter.This modification has most likely been done by attaching a(n) ________ to the policy.

Correct AnswerverifiedShow Answer

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A

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C

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This option allows you to buy specified ...
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True

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When selecting an insurance agent,some v...
View Answer

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Before buying life insurance,you should ...
View Answer

Correct Answer
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