Exam 8: Insuring Your Life

Rodney and Toni are a young couple with two small children.They are doing well financially,but their life insurance needs are high and their budget is tight.What type of life insurance will give them the most protection for their money?

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. -The majority of term policies have a [level | decreasing] face value.

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. -Annual premiums would be lower with [continuous | limited payment] whole life insurance.

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. -If your insurance policy promises to pay death benefits only if you die during a specified time,you have [term | whole] life insurance.

Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires to pay in premiums from now on.He has purchased a face value of $100,000 and can accumulate cash value.What type of life insurance has Kurt purchased?

Credit life insurance is often a legal requirement when you buy something on credit.

Universal life insurance is:

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

Deciding to sell a motorcycle would be an example of risk avoidance.

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. -If a loss is certain to occur,there is [a | no] risk.

Cash value is an important component of whole life,universal life,and variable life but is never a component of term insurance.

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. -The life insurance policy that clearly separates the protection and savings elements is a [whole life | universal life].

One should typically name both primary and contingent beneficiaries for life insurance policies.

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. -The [lump sum | life income] settlement option is the most commonly selected option.

Whole life insurance death benefits are not subject to income taxes.

Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,was the primary beneficiary and their children,Mimi (age 24)and Ann (age 30),were the contingent beneficiaries.All three survived Marilyn.How would the policy proceeds be distributed?

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. -In order to predict the number of losses that will occur in a given time accurately,insurance companies must study [large | small] numbers of cases.

The death benefit of _____ life insurance policy/policies may go down due to poor investment returns.

Loans are available from almost all life insurance policies.

If a primary beneficiary does not survive an insured,the proceeds of the policy revert to the insurance company.