Question 1

Fundamentally,group life insurance is ________ insurance.

Accepted Answer

A)  term
B)  whole life
C)  ordinary life
D)  permanent
E)  universal lifeF) C) and D)
G) All of the above

Question 2

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 E)
G) C) and D)

Question 3

Before you buy life insurance,you should determine whether you really need life insurance.

Accepted Answer

A) True 
 B)False

Question 4

An authoritative rating guide to the financial stability of the nation's insurers is published by all of the following except:

Accepted Answer

A)  Dow Jones Company.
B)  Standard & Poor's.
C)  Moody's Rating Service.
D)  
A)  M.Best Company.
E)  Weiss Research.F) A) and B)
G) B) and D)

Question 5

Under the Multiple of Income method of estimating life insurance needs,what important factor is excluded from the calculation?

Accepted Answer

A)  Annual income
B)  Your current employer
C)  Future earnings
D)  Past earnings
E)  Current assetsF) B) and E)
G) B) and D)

Question 6

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

Accepted Answer

A)  Provide an education for children
B)  Set up an estate plan
C)  Establish a regular income for survivors
D)  Accumulate savings
E)  All of theseF) A) and D)
G) D) and E)

Question 7

The premium for a whole life insurance policy remains constant:

Accepted Answer

A)  throughout your lifetime.
B)  during the first year of the policy.
C)  during the first five years of the policy.
D)  only through age 55.
E)  only through age 69.F) C) and E)
G) B) and D)

Question 8

Subject to certain minimums,which life insurance,first introduced in 1979,has a minimum amount that must be paid to cover the insurance portion?

Accepted Answer

A)  Whole life
B)  Ordinary life
C)  Universal life
D)  Adjustable life
E)  Variable lifeF) B) and E)
G) A) and D)

Question 9

Term insurance is a basic,"no frills" form of life insurance and is the best value for most consumers.

Accepted Answer

A) True 
 B)False

Question 10

Tim Bridges has a life insurance policy where he makes payments of $325 per year until he reaches the age of 65.His policy is then "paid up" for life.His beneficiaries will receive the face value upon his death.What type of life insurance policy does Tim likely have?

Accepted Answer

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

Question 11

Which of the following is false?

Accepted Answer

A)  Stock companies generally sell nonparticipating policies.
B)  A participating policy has a somewhat higher premium than a nonparticipating policy.
C)  Mutual companies generally sell participating policies.
D)  You can expect to receive a policy dividend from a stock company.
E)  Part of the premium is refunded to the policyholder in a participating policy.F) B) and D)
G) A) and B)

Question 12

In a participating policy,a part of the premium is refunded to the policyholder annually.

Accepted Answer

A) True 
 B)False

Question 13

Frank Keating has a life insurance policy that can be exchanged for a whole life policy without a medical examination.Once it has been exchanged,the premiums will increase.What type of term life insurance does Frank likely have?

Accepted Answer

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

Question 14

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 15

According to a survey by Salary.com,the equivalent wage of a stay-at-home mom is approximately how much?

Accepted Answer

A)  $54,000
B)  $75,000
C)  $100,000
D)  $163,000
E)  $175,000F) All of the above
G) C) and D)

Question 16

The "family need" method of determining life insurance needs provides a thorough estimation of your life insurance needs.

Accepted Answer

A) True 
 B)False

Question 17

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 E)
G) C) and E)

Question 18

The policy loan provision permits you to borrow any amount up to the cash value of the policy.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Most American families face a substantial loss when one spouse dies unexpectedly.

Accepted Answer

A) True 
 B)False

Exam 12: Life Insurance

Which of the following is false?

Correct AnswerverifiedShow Answer

Subject to certain minimums,which life insurance,first introduced in 1979,has a minimum amount that must be paid to cover the insurance portion?

Correct AnswerverifiedShow Answer

The policy loan provision permits you to borrow any amount up to the cash value of the policy.

Correct AnswerverifiedShow Answer

Frank Keating has a life insurance policy that can be exchanged for a whole life policy without a medical examination.Once it has been exchanged,the premiums will increase.What type of term life insurance does Frank likely have?

Correct AnswerverifiedShow Answer

Fundamentally,group life insurance is ________ insurance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An authoritative rating guide to the financial stability of the nation's insurers is published by all of the following except:

Correct AnswerverifiedShow Answer

Under the Multiple of Income method of estimating life insurance needs,what important factor is excluded from the calculation?

Correct AnswerverifiedShow Answer

The "family need" method of determining life insurance needs provides a thorough estimation of your life insurance needs.

Correct AnswerverifiedShow Answer

In a participating policy,a part of the premium is refunded to the policyholder annually.

Correct AnswerverifiedShow Answer

Before you buy life insurance,you should determine whether you really need life insurance.

Correct AnswerverifiedShow Answer

According to a survey by Salary.com,the equivalent wage of a stay-at-home mom is approximately how much?

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

Term insurance is a basic,"no frills" form of life insurance and is the best value for most consumers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Most American families face a substantial loss when one spouse dies unexpectedly.

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

The premium for a whole life insurance policy remains constant:

Correct AnswerverifiedShow Answer

Tim Bridges has a life insurance policy where he makes payments of $325 per year until he reaches the age of 65.His policy is then "paid up" for life.His beneficiaries will receive the face value upon his death.What type of life insurance policy does Tim likely have?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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