Exam 8: Insuring Your Life

You want to pay premiums for 20 years and have your insurance premium obligations finished at that time. However, you feel you will need life insurance for the rest of your life. You should choose a _____ insurance policy.

A life insurance agent who takes his or her profession seriously is likely to have earned which of the following professional certifications?

Which of the following statements regarding the multiple-of-earnings method is true?

Which of the following types of insurance policies provides temporary coverage for a set period?

Risk avoidance is an effective way to handle potentially small losses when the cost of insurance would be too expensive.

While performing needs analysis, when determining the financial resources that will be available after your death to offset your family's total economic needs, you would generally ignore:

INSTRUCTIONS: Choose the word or phrase in [ ] that 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. When choosing an insurance company, you should probably limit the companies you consider to those that have an annual premium volume of more than [ $10 million | $100 million ].

Which of the following statements regarding risk avoidance is true?

The first question to ask when considering the purchase of life insurance is whether you can afford it.

Which of the following statements regarding a good insurance agent is true?

Term insurance is generally the most economical form of life insurance for young people.

Employers often provide _____ life insurance as a fringe benefit for their full-time employees.

INSTRUCTIONS: Choose the word or phrase in [ ] that 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. Living benefits would [ increase | decrease ] the proceeds available for beneficiaries.

The settlement option chosen by most policyholders is:

You may reinstate your lapsed life insurance policy without passing a physical examination.

_____ involves abstaining from any activity that will affect an individual financially.

INSTRUCTIONS: Choose the word or phrase in [ ] that 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. An advance made by a life insurance company to a policyholder against a whole life policy is called a [ policy loan | participating policy ].

INSTRUCTIONS: Choose the word or phrase in [ ] that 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. The cash value will grow more quickly with a [ low-load  | traditional ] whole life policy.

Alice is 40 years old and earns $35,000 annually. The multiple-of-earnings method used to determine the amount of life insurance coverage needed for an individual shows that she should have 6.5 times her earnings. How much insurance should Alice have? (Show all work.)

If you have a high-risk hobby, then you could be required to pay more for life insurance than others pay.