Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Credit life insurance policies for auto loans and home mortgages are usually the best buys for the protection they offer.

Accepted Answer

A) True 
 B)False

Question 3

The easy method of determining life insurance 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) None of the above
G) A) and C) D

Question 4

If life insurance proceeds are left with the company, the company acts as trustee and pays the interest to the beneficiary.

Accepted Answer

A) True 
 B)False

Question 5

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

Accepted Answer

A) True 
 B)False

Question 6

Lori Simpson is thinking about purchasing some life insurance. She goes to a company where the policyholders are essentially the owners of the company. What type of life insurance company has she visited?

Accepted Answer

A)   Stock
B)   Debt
C)   Mutual
D)   Exclusionary
E)   CooperativeF) All of the above
G) B) and D)

Question 7

Your annual income is $50,000. What is your life insurance need based on the easy method?

Accepted Answer

A)   $245,000
B)   $300,000
C)   $345,000
D)   $400,000
E)   $450,000F) D) and E)
G) A) and C)

Question 8

Consumer awareness of life insurance has changed little over the years.

Accepted Answer

A) True 
 B)False

Question 9

Term insurance continues for the entire term even if you stop paying the premiums.

Accepted Answer

A) True 
 B)False

Question 10

Lisa Smith has her age listed on her driver's license as being three years younger than it actually is. This is also how old she tells her insurance company she is. Her insurance company has discovered she lied about her age. What provision of her life insurance contract states that her benefits will be what her premium would have bought if she had been truthful about her age?

Accepted Answer

A)   Policy loan
B)   Misstatement of age
C)   Cost-of-living protection
D)   Guaranteed insurability
E)   Grace periodF) D) and E)
G) A) and B)

Question 11

The cash values of a variable life insurance policy increase at a constant rate over time.

Accepted Answer

A) True 
 B)False

Question 12

When your life insurance objectives change, you should review the provisions in your policy before making any decisions regarding the policy.

Accepted Answer

A) True 
 B)False

Question 13

Your annual income is $100,000. 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)   $490,000
C)   $700,000
D)   $1,000,000
E)   $1,200,000F) A) and D)
G) B) and E)

Question 14

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

Question 15

Fundamentally, group insurance is ____________ insurance.

Accepted Answer

A)   term
B)   whole life
C)   ordinary life
D)   permanent
E)   universal lifeF) A) and B)
G) A) and C)

Question 16

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

Accepted Answer

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

Question 17

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  True

Question 18

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

Accepted Answer

A)   $54,000
B)   $76,000
C)   $97,000
D)   $113,000
E)   $120,000F) D) and E)
G) B) and E) D

Question 19

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

Question 20

The cost-of-living protection rider is designed to help prevent inflation from eroding the purchasing power of the protection your policy provides.

Accepted Answer

A) True 
 B)False

Exam 12: Life Insurance

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

Correct Answer
verified

Credit life insurance policies for auto loans and home mortgages are usually the best buys for the protection they offer.

Correct Answer
verified

The easy method of determining life insurance 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 Answer
verified
D

If life insurance proceeds are left with the company, the company acts as trustee and pays the interest to the beneficiary.

Correct Answer
verified

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

Correct Answer
verified

Lori Simpson is thinking about purchasing some life insurance. She goes to a company where the policyholders are essentially the owners of the company. What type of life insurance company has she visited?

Correct Answer
verified

Your annual income is $50,000. What is your life insurance need based on the easy method?

Correct Answer
verified

Consumer awareness of life insurance has changed little over the years.

Correct Answer
verified

Term insurance continues for the entire term even if you stop paying the premiums.

Correct Answer
verified

Correct Answer
verified

The cash values of a variable life insurance policy increase at a constant rate over time.

Correct Answer
verified

When your life insurance objectives change, you should review the provisions in your policy before making any decisions regarding the policy.

Correct Answer
verified

Your annual income is $100,000. 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

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

Correct Answer
verified

Fundamentally, group insurance is ____________ insurance.

Correct Answer
verified

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

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
True

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

Correct Answer
verified
D

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

Correct Answer
verified

The cost-of-living protection rider is designed to help prevent inflation from eroding the purchasing power of the protection your policy provides.

Correct Answer
verified

Exam 12: Life Insurance

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

Correct AnswerverifiedShow Answer

Credit life insurance policies for auto loans and home mortgages are usually the best buys for the protection they offer.

Correct AnswerverifiedShow Answer

The easy method of determining life insurance 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 AnswerverifiedD

If life insurance proceeds are left with the company, the company acts as trustee and pays the interest to the beneficiary.

Correct AnswerverifiedShow Answer

Cash value policies may make sense for people who intend to keep the policies for only a couple of years.

Correct AnswerverifiedShow Answer

Lori Simpson is thinking about purchasing some life insurance. She goes to a company where the policyholders are essentially the owners of the company. What type of life insurance company has she visited?

Correct AnswerverifiedShow Answer

Your annual income is $50,000. What is your life insurance need based on the easy method?

Correct AnswerverifiedShow Answer

Consumer awareness of life insurance has changed little over the years.

Correct AnswerverifiedShow Answer

Term insurance continues for the entire term even if you stop paying the premiums.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The cash values of a variable life insurance policy increase at a constant rate over time.

Correct AnswerverifiedShow Answer

When your life insurance objectives change, you should review the provisions in your policy before making any decisions regarding the policy.

Correct AnswerverifiedShow Answer

Your annual income is $100,000. 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

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

Correct AnswerverifiedShow Answer

Fundamentally, group insurance is ____________ insurance.

Correct AnswerverifiedShow Answer

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

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 AnswerverifiedTrue

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

Correct AnswerverifiedD

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

Correct AnswerverifiedShow Answer

The cost-of-living protection rider is designed to help prevent inflation from eroding the purchasing power of the protection your policy provides.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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D

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True

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D

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