Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following questions are important to consider when choosing an insurance agent?

Accepted Answer

A)   Is your agent available when needed?
B)   Does your agent advise you to have a financial plan?
C)   Is your agent happy to answer questions?
D)   Does your agent keep up with changes in the insurance field?
E)   You should be asking all of these questions.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

Accepted Answer

A)   $50,000
B)   $70,000
C)   $90,000
D)   $110,000
E)   $140,000

Question 5

Most American families face substantial loss when one spouse dies unexpectedly.

Accepted Answer

A) True 
 B)False

Question 6

Most participating policies are sold by:

Accepted Answer

A)   federal government agencies.
B)   state insurance commissioners.
C)   mutual life insurance companies.
D)   stock life insurance companies.
E)   investment banks.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The easy method of determining life insurance is based on the rule of thumb that a "typical family" will need about 70 percent of a wage-earner's salary for seven years.

Accepted Answer

A) True 
 B)False

Question 9

Two-earner couples may have a moderate need for life insurance, especially if they have a mortgage or other large debts.

Accepted Answer

A) True 
 B)False

Question 10

Scott Cumbie believes he has a 'typical' family and wants to determine his life insurance need. What method would probably be the fastest method for him to use to calculate his insurance need?

Accepted Answer

A)   Easy method
B)   DINK method
C)   Nonworking spouse method
D)   'Family need' method
E)   Sample method

Question 11

If your death would cause financial stress for your dependents, you should consider purchasing life insurance.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is true about group life insurance?

Accepted Answer

A)   Group life has been losing its popularity recently.
B)   The cost of insurance per $1,000 is the same for each employee.
C)   Group insurance is not a good bargain for older employees.
D)   Principles that apply to other forms of insurance do not apply to group life insurance.
E)   Group life is basically the same thing as term life insurance.

Question 13

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65. His policy is then 'paid up' for life. His beneficiaries will receive the face value upon his death. What type of life insurance does Tim likely have?

Accepted Answer

A)   Ordinary whole life
B)   Limited payment life
C)   Variable life
D)   Adjustable life
E)   Universal life

Question 14

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

Accepted Answer

In determining your life insurance needs...

Question 15

A beneficiary is a person who:

Accepted Answer

A)   acts as a trustee of your insurance policy.
B)   is a guardian of your children.
C)   acts on your behalf.
D)   is designated to receive life insurance proceeds.
E)   acts as an agent handling your insurance policy.

Question 16

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Accepted Answer

A) True 
 B)False

Question 17

Life insurance premiums are determined basically by the:

Accepted Answer

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

Question 18

The life expectancy of a female at the age of 30 is 47.65 years. It means that:

Accepted Answer

A)   a 30-year-old female has the highest probability of dying.
B)   a 30-year-old female has the highest probability of living.
C)   females alive at 30 years of age have an average number of 47.65 years still left to live.
D)   47.65 is the average age at which all females, age 30, will die.
E)   very few 30-year-old females will live past the age of 77.

Question 19

What are the two types of life insurance companies? Explain the basic features of each type.

Accepted Answer

There are two types of life insurance co...

Question 20

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

Exam 12: Life Insurance

Two-earner couples may have a moderate need for life insurance, especially if they have a mortgage or other large debts.

Correct AnswerverifiedShow Answer

What are the two types of life insurance companies? Explain the basic features of each type.

Correct AnswerverifiedThere are two types of life insurance co...View AnswerShow Answer

The life expectancy of a female at the age of 30 is 47.65 years. It means that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Life insurance premiums are determined basically by the:

Correct AnswerverifiedShow Answer

Most American families face substantial loss when one spouse dies unexpectedly.

Correct AnswerverifiedShow Answer

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Correct AnswerverifiedShow Answer

Using the "nonworking" spouse method, what should be the life insurance needs for a family whose youngest child is 7 years old?

Correct AnswerverifiedShow Answer

If your death would cause financial stress for your dependents, you should consider purchasing life insurance.

Correct AnswerverifiedShow Answer

Most participating policies are sold by:

Correct AnswerverifiedShow Answer

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.

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

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

Correct AnswerverifiedShow Answer

Tim Bridges has a life insurance policy where he makes payments of $265 per year until he reaches the age of 65. His policy is then 'paid up' for life. His beneficiaries will receive the face value upon his death. What type of life insurance does Tim likely have?

Correct AnswerverifiedShow Answer

Which of the following statements is true about group life insurance?

Correct AnswerverifiedShow Answer

Which of the following questions are important to consider when choosing an insurance agent?

Correct AnswerverifiedShow Answer

What are the four methods of determining your life insurance needs? Explain the basic principle of each method.

Correct AnswerverifiedIn determining your life insurance needs...View AnswerShow Answer

A beneficiary is a person who:

Correct AnswerverifiedShow Answer

The easy method of determining life insurance is based on the rule of thumb that a "typical family" will need about 70 percent of a wage-earner's salary for seven years.

Correct AnswerverifiedShow Answer

Scott Cumbie believes he has a 'typical' family and wants to determine his life insurance need. What method would probably be the fastest method for him to use to calculate his insurance need?

Correct AnswerverifiedShow Answer

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There are two types of life insurance co...
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In determining your life insurance needs...
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