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Exam 12: Life Insurance

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Question 21

Multiple Choice

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Typical examples of uses of life insurance proceeds include:

A) paying off a home mortgage.
B) funding an endowment.
C) making charitable bequests.
D) paying estate taxes.
E) all of the items listed.

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

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Question 22

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

A) True
B) False

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Question 23

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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?

The premium for a whole life policy remains constant for as long as an insured lives.

What percent of all applicants who apply for life insurance are found to be insurable?

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

If you have convertible term insurance,you can exchange it for a whole life policy without a medical examination and at a higher premium.

The DINK (Duel Income No Kids)method of determining life insurance needs assumes that the spouse will continue to work after husband's/wife's death.

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

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

Shelley Jackson has a life insurance policy where she makes payments of $185 per year for the rest of her life.This policy has a cash value that increases while she continues to make payments.If she gives up her insurance,the cash value is the amount she would receive from this policy.What type of life insurance does Shelley likely have?

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?

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

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

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?

The most common type of permanent life insurance is the whole life policy.

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

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

If your insurance agent does not give you an interest-adjusted index,your best bet is to:

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