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Exam 13: Life Insurance

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Question 1

Multiple Choice

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Whole life insurance has a ________ premium and has ________ cash value build-up over the life of the policy.

A) fixed; no
B) variable; a
C) fixed; a
D) variable; no

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Question 2

Multiple Choice

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Using the income method, if Jenny has an annual income of $50,000, debt of $20,000, and a factor of 10, then she should purchase ________ of life insurance.

A) $100,000
B) $200,000
C) $300,000
D) $500,000

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Question 3

True/False

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Life insurance is critical to protect a family's financial situation in the event that a breadwinner dies.

An employer provides all employees with term life insurance equal to their annual income. Using the income method with a factor of 5, how much additional life insurance will an employee earning $75,000 per year need?

Which of the following types of insurance is intended to provide a limited choice of investments and an insurance component in the event of death?

A limited payment option on a whole life policy pays a smaller share of the policy face value to beneficiaries during the first five years of the policy.

The services that insurance companies provide should not be a factor in selecting a life insurance company.

Universal life insurance is similar to whole life, but allows the policyholder more choices of how the savings portion of the premiums is invested.

Life insurance that provides insurance coverage for a specified term and also includes a savings option is called ________ insurance.

The problem with the cash value build-up of a whole life insurance policy is that the money can only be used to pay off the policy or buy additional insurance.

All of the following are limitations of the budget method of estimating life insurance needs, except

The easiest method of estimating your life insurance needs is the

When choosing a life insurance company, you should consider all of the following criteria, except

If you buy a term insurance policy with a conversion option, this means that you

Use the following two columns of items to answer the matching questions below: -variable life insurance A)cash value and benefits to the beneficiary B)combination of term insurance and a savings plan C)premiums constant with reduced benefits D)term insurance with a variable investment portion

The income method of determining how much life insurance coverage you need is

Whole life insurance is also referred to as

A life insurance premium is ________ related to your age.

A universal life policy gives policyholders the right to select their ________ which is a right that whole life policyholders do not have.

Since a key purpose of life insurance is to provide for dependents in the event of a main earner's death, it is logical that the amount of insurance purchased should be