Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which type of life insurance plan requires you to pay premiums for a stipulated period, usually 20 or 30 years, or until you reach a specified age?

Accepted Answer

A)   Modified life policy
B)   Variable life policy
C)   Adjustable life policy
D)   Limited payment policy
E)   Endowment policyF) B) and E)
G) A) and C)

Question 3

The lump-sum payment settlement option is the least used option.

Accepted Answer

A) True 
 B)False

Question 4

The amount of your life insurance premium for each $1,000 of coverage depends primarily on the age at which you purchase the insurance.

Accepted Answer

A) True 
 B)False

Question 5

The most common type of permanent life insurance is called:

Accepted Answer

A)   whole life.
B)   term life.
C)   universal life.
D)   modified life.
E)   variable life.F) D) and E)
G) A) and E)

Question 6

Individuals and families purchase life insurance primarily to:

Accepted Answer

A)   pay liability claims resulting from accidents.
B)   fill financial needs created by the loss of the breadwinner.
C)   fund lavish retirement vacations.
D)   keep up with people with a similar financial situation.
E)   make early retirement possible.F) B) and E)
G) C) and D)

Question 7

Jane Curtain has a participating life insurance policy that returns part of her premiums at the end of the year. What is the money that is returned to Jane called?

Accepted Answer

A)   Cash Value
B)   Policy Dividend
C)   Beneficiary
D)   Rider
E)   Double IndemnityF) A) and C)
G) B) and C)

Question 8

Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he visited?

Accepted Answer

A)   Stock
B)   Debt
C)   Mutual
D)   Exclusionary
E)   CooperativeF) C) and E)
G) A) and E)

Question 9

Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount, subject to certain minimums. What type of insurance does Russell likely have?

Accepted Answer

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

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 annuity is a financial contract written by an insurance company to provide you with a regular income.

Accepted Answer

A) True 
 B)False

Question 12

Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes. What type of term life insurance does Renee likely have?

Accepted Answer

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

Question 13

Life insurance is available from a wide range of private and public sources.

Accepted Answer

A) True 
 B)False

Question 14

A suicide clause means that the insurance company:

Accepted Answer

A)   can cancel the policy if suicide is proven.
B)   will pay the death benefit equal to the amount of the premium paid, if the insured dies during the first two years that the policy is in force.
C)   will pay only half the death benefits if the insured commits suicide.
D)   automatically pays the premium out of the policy's cash value.
E)   will not pay any death benefits is suicide is suspected.F) B) and D)
G) A) and B)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The first step in buying insurance is to determine whether you really need life insurance.

Accepted Answer

A) True 
 B)False

Question 17

What do the terms "term", "decreasing" or "declining term", and "whole life" mean with respect to life insurance?

Accepted Answer

Term or level term provides a fixed amou...

Question 18

A financial contract written by an insurance company to provide you with a regular monthly income for as long as you live is called:

Accepted Answer

A)   whole life insurance.
B)   term life insurance.
C)   modified life insurance.
D)   single-premium insurance.
E)   an annuity.F) A) and D)
G) C) and D)

Question 19

Single persons living alone have little or no need for life insurance.

Accepted Answer

A) True 
 B)False

Question 20

The DINK method assumes that:

Accepted Answer

A)   you have only two children.
B)   your spouse does not work.
C)   your insurance needs are complex.
D)   your spouse will continue to work after your death.
E)   your spouse is in an occupation with an uncertain future.F) A) and C)
G) A) and D)

Exam 12: Life Insurance

Renee Warning has a life insurance policy where the payments to beneficiaries get smaller as time passes. What type of term life insurance does Renee likely have?

Correct AnswerverifiedShow Answer

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

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 the money that is returned to Jane called?

Correct AnswerverifiedShow Answer

A financial contract written by an insurance company to provide you with a regular monthly income for as long as you live is called:

Correct AnswerverifiedShow Answer

Which type of life insurance plan requires you to pay premiums for a stipulated period, usually 20 or 30 years, or until you reach a specified age?

Correct AnswerverifiedShow Answer

The first step in buying insurance is to determine whether you really need life insurance.

Correct AnswerverifiedShow Answer

Single persons living alone have little or no need for life insurance.

Correct AnswerverifiedShow Answer

Life insurance is available from a wide range of private and public sources.

Correct AnswerverifiedShow Answer

Russell Lowe has a life insurance policy that allows him to pay his premiums virtually at any time and virtually in any amount, subject to certain minimums. What type of insurance does Russell likely have?

Correct AnswerverifiedShow Answer

The lump-sum payment settlement option is the least used option.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Jerry Lewis is thinking about purchasing some life insurance. He goes to a company that is owned by shareholders. What type of life insurance company has he visited?

Correct AnswerverifiedShow Answer

The amount of your life insurance premium for each $1,000 of coverage depends primarily on the age at which you purchase the insurance.

Correct AnswerverifiedShow Answer

The most common type of permanent life insurance is called:

Correct AnswerverifiedShow Answer

The DINK method assumes that:

Correct AnswerverifiedShow Answer

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Correct AnswerverifiedShow Answer

What do the terms "term", "decreasing" or "declining term", and "whole life" mean with respect to life insurance?

Correct AnswerverifiedTerm or level term provides a fixed amou...View AnswerShow 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 suicide clause means that the insurance company:

Correct AnswerverifiedShow Answer

Individuals and families purchase life insurance primarily to:

Correct AnswerverifiedShow Answer

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Term or level term provides a fixed amou...
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