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Exam 8: Insuring Your Life

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Question 51

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Underwriting helps protect life insurance companies from which of the following:

A) major downturns in the economy
B) short-term shocks in the investment markets
C) adverse selection
D) having too many healthy people buy life insurance
E) shifts in the macro-social structure of the population

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Question 52

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The primary purpose of life insurance is to protect family members financially after one's death.

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Question 53

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The multiple of earnings approach to evaluating life insurance needs is simplistic but can be unreliable.

Group life insurance is

The basic purpose of insurance is to protect you from the results of accidental losses.

The primary purpose of life insurance is to provide

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Deciding which people will be insured by an insurance company is a function of the [agent | underwriter].

If a life insurance policy pays dividends,it is called:

Like universal life insurance,variable life insurance provides a minimum guaranteed return.

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

A life insurance policy should contain a co-insurance clause.

Which of the following policy features allow the insured to increase coverage periodically without showing proof of insurability?

Group life insurance is often provided as a fringe benefit by employers.

A grace period permits the policy holder to retain insurance even though the premium has not been paid for

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -You would be most likely to assume the risk of a [small | large] potential loss.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Life insurance [will | will not] pay proceeds if an insured is killed in a commercial airline crash.

Loans are available from almost all life insurance policies.

Paying life insurance premiums on a(n) ____ basis will be the most economical.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -It [is | is not] possible to avoid most risks in your life.

Term life insurance is characterized by