Question 1

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

Accepted Answer

A)  rider.
B)  waiver of premium.
C)  automatic premium loan.
D)  beneficiary.
E)  incontestability clausE.F) A) and B)
G) B) and E)

Question 2

Decreasing term life insurance is no longer available.

Accepted Answer

A) True 
 B)False

Question 3

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 4

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 5

A plan that insures a large number of persons under the terms of a single policy without requiring medical examinations is called a(n) ____________ life insurance policy plan.

Accepted Answer

A)  individual
B)  whole
C)  large number
D)  permanent
E)  groupF) A) and E)
G) C) and E)

Question 6

A suicide clause means that the insurance company:

Accepted Answer

A)  can cancel the policy if suicide is proven.
B)  will pay the death benefit equal to the amount of the premium paid,if the insured dies 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 is suicide is suspected.F) A) and B)
G) A) and C)

Question 7

Richard Beck has a life insurance policy which he has altered to include an accidental death benefit payable to his son and daughter.This alteration has most likely been done by attaching a(n) ____ to the policy.

Accepted Answer

A)  accelerated benefits clause
B)  policy dividend
C)  guaranteed insurability clause
D)  second-to-die rider
E)  double indemnity riderF) B) and D)
G) C) and D)

Question 8

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)  $140,000F) B) and D)
G) A) and E)

Question 9

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

Accepted Answer

A) True 
 B)False

Question 10

What are the steps in creating a plan to buy your life insurance?

Accepted Answer

Before buying life insurance,you should ...

Question 11

A contract stating that the annuitant will receive a constant amount of income over a certain period or for life is called a:

Accepted Answer

A)  flexible annuity.
B)  fixed annuity.
C)  variable annuity.
D)  ERISA annuity.
E)  participating annuity.F) A) and E)
G) A) and B)

Question 12

Life insurance proceeds may provide a retirement income.

Accepted Answer

A) True 
 B)False

Question 13

Permanent insurance can be limited payment,variable,adjustable,or universal life insurance.

Accepted Answer

A) True 
 B)False

Question 14

The amount of your 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 15

Term life insurance premiums decrease as you get older.

Accepted Answer

A) True 
 B)False

Question 16

Which statement is correct regarding mutual insurance companies?

Accepted Answer

A)  Mutual insurance companies have stockholders.
B)  Nearly all mutual companies issue only nonparticipating policies.
C)  Premiums are lower than those offered by stock companies.
D)  Mutual companies do not declare policy dividends.
E)  A mutual company refunds part of the premium to the policyholders.F) A) and E)
G) B) and C)

Question 17

Your first step in determining a life insurance program should be to:

Accepted Answer

A)  consult a local insurance company agent.
B)  buy as much life insurance as you can afford.
C)  estimate your life insurance requirements.
D)  determine your life insurance objectives.
E)  evaluate the ratings of the insurance company.F) A) and D)
G) B) and C)

Question 18

The "family need" method of determining life insurance need provides a thorough estimation of life insurance needs.

Accepted Answer

A) True 
 B)False

Question 19

An important provision in every life insurance policy is the right to name your beneficiary.

Accepted Answer

A) True 
 B)False

Question 20

What should you consider before you buy life insurance?

Accepted Answer

A)  your present and future sources of income
B)  your savings
C)  employer's group life insurance
D)  pension benefits
E)  all of the factors listed in the other answersF) A) and D)
G) None of the above

Exam 12: Life Insurance

The "family need" method of determining life insurance need provides a thorough estimation of life insurance needs.

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

What should you consider before you buy life insurance?

Correct AnswerverifiedShow Answer

Your first step in determining a life insurance program should be to:

Correct AnswerverifiedShow Answer

A suicide clause means that the insurance company:

Correct AnswerverifiedShow Answer

Decreasing term life insurance is no longer available.

Correct AnswerverifiedShow Answer

A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n) :

Correct AnswerverifiedShow Answer

Richard Beck has a life insurance policy which he has altered to include an accidental death benefit payable to his son and daughter.This alteration has most likely been done by attaching a(n) ____ to the policy.

Correct AnswerverifiedShow Answer

What are the steps in creating a plan to buy your life insurance?

Correct AnswerverifiedBefore buying life insurance,you should ...View AnswerShow Answer

A contract stating that the annuitant will receive a constant amount of income over a certain period or for life is called a:

Correct AnswerverifiedShow Answer

Life insurance proceeds may provide a retirement income.

Correct AnswerverifiedShow Answer

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

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

Permanent insurance can be limited payment,variable,adjustable,or universal life insurance.

Correct AnswerverifiedShow Answer

An important provision in every life insurance policy is the right to name your beneficiary.

Correct AnswerverifiedShow Answer

Which statement is correct regarding mutual insurance companies?

Correct AnswerverifiedShow Answer

Term life insurance premiums decrease as you get older.

Correct AnswerverifiedShow Answer

A plan that insures a large number of persons under the terms of a single policy without requiring medical examinations is called a(n) ____________ life insurance policy plan.

Correct AnswerverifiedShow Answer

If life insurance proceeds are left with the company,the company acts as trustee and pays the interest to the beneficiary.

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

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Before buying life insurance,you should ...
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There are two types of life insurance co...
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