Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Typical examples of uses of life insurance proceeds include:

Accepted Answer

A)   paying off a home mortgage.
B)   funding an endowment.
C)   making charitable bequests.
D)   paying estate taxes.
E)   All of these.F) All of the above
G) None of the above

Question 3

Term insurance is protection for a specified period of time, usually:

Accepted Answer

A)   1 year
B)   5 years
C)   10 years
D)   20 years
E)   Term insurance is offered in all of the intervals listed.F) A) and E)
G) C) and E)

Question 4

The DINK method of determining life insurance need is best suited for:

Accepted Answer

A)   singles.
B)   single parent households.
C)   non-working spouses.
D)   working spouses with no dependents.
E)   senior citizens.F) A) and B)
G) A) and C)

Question 5

The premium for the whole life policy increases with your age.

Accepted Answer

A) True 
 B)False

Question 6

The total debts of you and your spouse include the following: mortgage, $180,000; auto loan, $10,000; credit card balance, $2,000; and other debts of $6,000. Further, you estimate that your funeral will cost $4,000. Your spouse expects to continue to work after your death. What is your life insurance need using the DINK method?

Accepted Answer

A)   $103,000
B)   $106,000
C)   $226,000
D)   $202,000
E)   $99,000F) A) and E)
G) A) and D)

Question 7

Which statement is correct regarding stock life insurance companies?

Accepted Answer

A)   A stock company sells participating policies.
B)   A stock company always charges higher premiums than mutual companies.
C)   A policyholder participates in the profit or loss of the company.
D)   A stock company generally sells nonparticipating (non par)  policies.
E)   A stock company is owned by policyholders.F) A) and E)
G) C) and D)

Question 8

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

Question 9

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 D)
G) B) and E)

Question 10

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) All of the above
G) C) and E)

Question 11

Francesca Brown has a life insurance policy that provides her with protection for the next five years. However, she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time. Her premiums will rise during each five-year period. What type of term life insurance does Francesca likely have?

Accepted Answer

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

Question 12

Permanent insurance can be limited payment, variable, adjustable, or universal life insurance.

Accepted Answer

A) True 
 B)False

Question 13

Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old?

Accepted Answer

A)   $30,000
B)   $50,000
C)   $80,000
D)   $100,000
E)   $180,000F) A) and D)
G) A) and C)

Question 14

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) None of the above

Question 15

One important feature of a term life policy is its cash value.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)   Cash value accumulation
B)   You can take a loan against the policy
C)   Takes advantage of current interest rates
D)   Low outlay
E)   Generally fixed premium amountF) A) and C)
G) C) and D)

Question 17

The coverage of term insurance ends at the conclusion of the term, but you can continue it if you have a renewability option.

Accepted Answer

A) True 
 B)False

Question 18

Which is a correct statement about life insurance?

Accepted Answer

A)   People are less apt to actively seek life insurance than health insurance.
B)   Private sources are the only available sources for life insurance.
C)   Life insurance is extremely important if you are single and living alone.
D)   There is only one type of life insurance.
E)   Consumer awareness of life insurance has changed considerably over the years.F) A) and B)
G) C) and D)

Question 19

Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have?

Accepted Answer

A)   Straight
B)   Renewable
C)   Convertible
D)   Decreasing
E)   Return-of-premiumF) B) and D)
G) B) and C)

Question 20

Which of the following are common uses of life insurance proceeds?

Accepted Answer

A)   Education of children
B)   Make charitable bequests after death
C)   Pay off the mortgage on a home
D)   Uncovered medical expenses and funeral costs
E)   All of these are common uses.F) A) and C)
G) A) and B)

Exam 12: Life Insurance

Term insurance is protection for a specified period of time, usually:

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Which statement is correct regarding stock life insurance companies?

Correct Answer
verified

Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old?

Correct Answer
verified

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 Answer
verified

Which of the following are common uses of life insurance proceeds?

Correct Answer
verified

One important feature of a term life policy is its cash value.

Correct Answer
verified

The coverage of term insurance ends at the conclusion of the term, but you can continue it if you have a renewability option.

Correct Answer
verified

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

Correct Answer
verified

Which is a correct statement about life insurance?

Correct Answer
verified

Typical examples of uses of life insurance proceeds include:

Correct Answer
verified

Correct Answer
verified

Permanent insurance can be limited payment, variable, adjustable, or universal life insurance.

Correct Answer
verified

Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have?

Correct Answer
verified

Your life insurance policy is valuable only if it:

Correct Answer
verified

The premium for the whole life policy increases with your age.

Correct Answer
verified

A two-earner couple likely will have:

Correct Answer
verified

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

Correct Answer
verified

The DINK method of determining life insurance need is best suited for:

Correct Answer
verified

Exam 12: Life Insurance

Term insurance is protection for a specified period of time, usually:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which statement is correct regarding stock life insurance companies?

Correct AnswerverifiedShow Answer

Using the "nonworking" spouse method, what should be the life insurance need for a family whose youngest child is 10 years old?

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

Which of the following are common uses of life insurance proceeds?

Correct AnswerverifiedShow Answer

One important feature of a term life policy is its cash value.

Correct AnswerverifiedShow Answer

The coverage of term insurance ends at the conclusion of the term, but you can continue it if you have a renewability option.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which is a correct statement about life insurance?

Correct AnswerverifiedShow Answer

Typical examples of uses of life insurance proceeds include:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Permanent insurance can be limited payment, variable, adjustable, or universal life insurance.

Correct AnswerverifiedShow Answer

Taylor Jones has a life insurance policy that returns every cent she pays in premiums if she outlives the term of the policy. She knows this policy costs 30 to 50 percent more than a traditional policy but thinks it is worth it. What type of term life insurance does Taylor have?

Correct AnswerverifiedShow Answer

Your life insurance policy is valuable only if it:

Correct AnswerverifiedShow Answer

The premium for the whole life policy increases with your age.

Correct AnswerverifiedShow Answer

A two-earner couple likely will have:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The DINK method of determining life insurance need is best suited for:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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