Question 1

A settlement option that provides for payment of the life insurance proceeds in equal periodic installments for a specified number of years after your death is called a:

Accepted Answer

A)  flexible annuity.
B)  limited installment payment.
C)  life income option.
D)  lump-sum payment.
E)  proceeds left with the company.

Question 2

Which type of life insurance policy provides coverage from the beginning of the contract to maturity and guarantees payment of a specified sum to the insured,even if he or she is still living at the end of the contract period?

Accepted Answer

A)  Credit life insurance
B)  Endowment life insurance
C)  Industrial life insurance
D)  Group life insurance
E)  Universal life insurance

Question 3

The easy method of determining life insurance needs assumes that your family is:

Accepted Answer

A)  rich.
B)  poor.
C)  typical.
D)  young.
E)  old.

Question 4

Which of the following is a popular app for estimating life insurance needs?

Accepted Answer

A)  www.Kiplinger.com/insurance
B)  Human Life Value Calculator
C)  money.msn.com
D)  Today
E)  www.familyneeds.com

Question 5

In the 1950s,the life insurance industry developed:

Accepted Answer

A)  the forces of supply and demand.
B)  the insurance division of the federal government.
C)  the forces of competition.
D)  mortality tables.
E)  the principle of life insurance.

Question 6

Decreasing term life insurance is no longer available.

Accepted Answer

A) True 
 B)False

Question 7

The amount of your whole 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 8

What should you consider before you buy life insurance?

Accepted Answer

A)  Your past sources of income
B)  Your cost of health insurance
C)  Your vacation benefits
D)  Your accumulated sick leave
E)  Your savings

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

Which of the following offers special features,including a stepped-up death benefit,a guaranteed minimum income benefit,or long-term care insurance that often carry additional fees and charges?

Accepted Answer

A)  Whole life insurance
B)  Term life insurance
C)  Modified life insurance
D)  Single-premium insurance
E)  A variable annuity

Question 12

Which type of insurance is sometimes called temporary life insurance?

Accepted Answer

A)  Whole life insurance
B)  Term insurance
C)  Straight life
D)  Ordinary life
E)  Cash value life

Question 13

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

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 a death benefit equal to the amount of the premium paid,if the insured dies by suicide 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 if suicide is suspected.

Question 15

Using the "nonworking" spouse method,what should be the life insurance need for a family whose youngest child is 12 years old?

Accepted Answer

A)  $30,000
B)  $50,000
C)  $60,000
D)  $100,000
E)  $120,000

Question 16

To obtain the insurance proceeds from a life insurance policy,who will have to send the policy and a copy of your death certificate to the life insurance company?

Accepted Answer

A)  Your doctor
B)  Your family friend
C)  Your beneficiary
D)  Your coworker
E)  Your funeral home

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Term insurance is protection for a specified period of time,usually 1,5,10,or 20 years.

Accepted Answer

A) True 
 B)False

Question 19

Using the Multiple of Income Method to estimate life insurance needs,what is the minimum amount of insurance needed for Susan Smith if her annual income is $60,000?

Accepted Answer

A)  $60,000
B)  $100,000
C)  $150,000
D)  $200,000
E)  $300,000

Question 20

When you purchase a variable life policy,the insurance company assumes the risk of poor investment performance.

Accepted Answer

A) True 
 B)False

Exam 12: Life Insurance

The easy method of determining life insurance needs assumes that your family is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A settlement option that provides for payment of the life insurance proceeds in equal periodic installments for a specified number of years after your death is called a:

Correct AnswerverifiedShow Answer

Which of the following is a popular app for estimating life insurance needs?

Correct AnswerverifiedShow Answer

Using the Multiple of Income Method to estimate life insurance needs,what is the minimum amount of insurance needed for Susan Smith if her annual income is $60,000?

Correct AnswerverifiedShow Answer

Which type of life insurance policy provides coverage from the beginning of the contract to maturity and guarantees payment of a specified sum to the insured,even if he or she is still living at the end of the contract period?

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

Correct AnswerverifiedShow Answer

When you purchase a variable life policy,the insurance company assumes the risk of poor investment performance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In the 1950s,the life insurance industry developed:

Correct AnswerverifiedShow Answer

Using the "nonworking" spouse method,what should be the life insurance need for a family whose youngest child is 12 years old?

Correct AnswerverifiedShow Answer

Which type of insurance is sometimes called temporary life insurance?

Correct AnswerverifiedShow Answer

A suicide clause means that the insurance company:

Correct AnswerverifiedShow Answer

Which of the following offers special features,including a stepped-up death benefit,a guaranteed minimum income benefit,or long-term care insurance that often carry additional fees and charges?

Correct AnswerverifiedShow Answer

What should you consider before you buy life insurance?

Correct AnswerverifiedShow Answer

To obtain the insurance proceeds from a life insurance policy,who will have to send the policy and a copy of your death certificate to the life insurance company?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Term insurance is protection for a specified period of time,usually 1,5,10,or 20 years.

Correct AnswerverifiedShow Answer

Decreasing term life insurance is no longer available.

Correct AnswerverifiedShow Answer

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