Question 1

All types of life insurance offer a cash surrender value.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

Accepted Answer

A)  Universal life 
B)  Whole life 
C)  Variable life 
D)  Term life 
E)  Adjustable whole life 
A)  Universal life 
B)  Whole life 
C)  Variable life 
D)  Term life 
E)  Adjustable whole life

Question 3

Group life insurance is:

Accepted Answer

A)  a term policy designed to pay off the mortgage balance in the event of the borrower's death. 
B)  an insurance that is sold in conjunction with the sale of a group of assets. 
C)  an insurance in which benefits are a function of the returns being generated on the investments selected by the policyholder. 
D)  an insurance that provides a master policy for a group. 
E)  all of the above 
A)  a term policy designed to pay off the mortgage balance in the event of the borrower's death. 
B)  an insurance that is sold in conjunction with the sale of a group of assets. 
C)  an insurance in which benefits are a function of the returns being generated on the investments selected by the policyholder. 
D)  an insurance that provides a master policy for a group. 
E)  all of the above

Question 4

The settlement option chosen by most beneficiaries is:

Accepted Answer

A)  lump sum. 
B)  interest only. 
C)  fixed amount. 
D)  fixed time. 
E)  life income. 
A)  lump sum. 
B)  interest only. 
C)  fixed amount. 
D)  fixed time. 
E)  life income.

Question 5

The primary purpose of life insurance is to protect family members financially after one's death.

Accepted Answer

A) True 
 B)False

Question 6

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

Accepted Answer

A) True 
 B)False

Question 7

What is it called when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary?

Accepted Answer

A)  Participating policy 
B)  Living benefit rider 
C)  Viatical settlement 
D)  Guaranteed purchase option 
E)  None of the above 
A)  Participating policy 
B)  Living benefit rider 
C)  Viatical settlement 
D)  Guaranteed purchase option 
E)  None of the above

Question 8

Like universal life insurance,variable life insurance provides a minimum guaranteed return.

Accepted Answer

A) True 
 B)False

Question 9

The annual premium on a straight term policy can increase each year on an annual renewable term policy or remain level throughout the policy period on a level premium term policy.

Accepted Answer

A) True 
 B)False

Question 10

The least expensive form of whole life insurance protection is a:

Accepted Answer

A)  term insurance. 
B)  straight life insurance. 
C)  limited payment insurance. 
D)  universal insurance. 
E)  none of the above 
A)  term insurance. 
B)  straight life insurance. 
C)  limited payment insurance. 
D)  universal insurance. 
E)  none of the above

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Underwriting helps protect life insurance companies from which of the following:

Accepted Answer

A)  major downturns in the economy. 
B)  short-term shocks in the investment markets. 
C)  adverse selection. 
D)  having too many healthy people buy life insurance. 
E)  shifts in the macro-social structure of the population. 
A)  major downturns in the economy. 
B)  short-term shocks in the investment markets. 
C)  adverse selection. 
D)  having too many healthy people buy life insurance. 
E)  shifts in the macro-social structure of the population.

Question 13

Cash value will not be forfeited to the insurance company for non-payment of a premium,but will instead always accrue to the benefit of the policy owner.

Accepted Answer

A) True 
 B)False

Question 14

You may reinstate your lapsed life insurance policy without answering health related questions again.

Accepted Answer

A) True 
 B)False

Question 15

Policy dividends paid on participating policies reflect the difference between the premiums that are charged and the amount of premium necessary to fund the actual mortality experience of the company.

Accepted Answer

A) True 
 B)False

Question 16

Which type of settlement option pays for over a predetermined time frame?

Accepted Answer

A)  Lump sum 
B)  Interest only 
C)  Lifetime income 
D)  Fixed period 
E)  Fixed amount 
A)  Lump sum 
B)  Interest only 
C)  Lifetime income 
D)  Fixed period 
E)  Fixed amount

Question 17

Avoiding alcoholic beverage while driving is an example of loss prevention.

Accepted Answer

A) True 
 B)False

Question 18

The probability of a loss occurring can be reduced by:

Accepted Answer

A)  risk observance. 
B)  loss prevention. 
C)  risk assumption. 
D)  risk retention. 
E)  insurance. 
A)  risk observance. 
B)  loss prevention. 
C)  risk assumption. 
D)  risk retention. 
E)  insurance.

Question 19

A grace period permits the policy holder to retain insurance even though the premium has not been paid for:

Accepted Answer

A)  12 months. 
B)  6 months. 
C)  3 months. 
D)  50 days. 
E)  31 days. 
A)  12 months. 
B)  6 months. 
C)  3 months. 
D)  50 days. 
E)  31 days.

Question 20

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.
-Smoking [will | will not] be a factor in determining life insurance premiums.

Accepted Answer

The answer of Choose the word or phrase in [...

All types of life insurance offer a cash surrender value.

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

Group life insurance is:

The settlement option chosen by most beneficiaries is:

The primary purpose of life insurance is to protect family members financially after one's death.

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

What is it called when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary?

Like universal life insurance,variable life insurance provides a minimum guaranteed return.

The annual premium on a straight term policy can increase each year on an annual renewable term policy or remain level throughout the policy period on a level premium term policy.

The least expensive form of whole life insurance protection is a:

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

Underwriting helps protect life insurance companies from which of the following:

Cash value will not be forfeited to the insurance company for non-payment of a premium,but will instead always accrue to the benefit of the policy owner.

You may reinstate your lapsed life insurance policy without answering health related questions again.

Policy dividends paid on participating policies reflect the difference between the premiums that are charged and the amount of premium necessary to fund the actual mortality experience of the company.

Which type of settlement option pays for over a predetermined time frame?

Avoiding alcoholic beverage while driving is an example of loss prevention.

The probability of a loss occurring can be reduced by:

A grace period permits the policy holder to retain insurance even though the premium has not been paid for:

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. -Smoking [will | will not] be a factor in determining life insurance premiums.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 8: Insuring Your Life

All types of life insurance offer a cash surrender value.

Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

Group life insurance is:

The settlement option chosen by most beneficiaries is:

The primary purpose of life insurance is to protect family members financially after one's death.

Risk avoidance means asking an insurance company to take over the risk for a small payment (the premium).

What is it called when an insured sells an interest in the life insurance policy to an investor,who then becomes the policy's beneficiary?

Like universal life insurance,variable life insurance provides a minimum guaranteed return.

The annual premium on a straight term policy can increase each year on an annual renewable term policy or remain level throughout the policy period on a level premium term policy.

The least expensive form of whole life insurance protection is a:

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

Underwriting helps protect life insurance companies from which of the following:

Cash value will not be forfeited to the insurance company for non-payment of a premium,but will instead always accrue to the benefit of the policy owner.

You may reinstate your lapsed life insurance policy without answering health related questions again.

Policy dividends paid on participating policies reflect the difference between the premiums that are charged and the amount of premium necessary to fund the actual mortality experience of the company.

Which type of settlement option pays for over a predetermined time frame?

Avoiding alcoholic beverage while driving is an example of loss prevention.

The probability of a loss occurring can be reduced by:

A grace period permits the policy holder to retain insurance even though the premium has not been paid for:

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. -Smoking [will | will not] be a factor in determining life insurance premiums.

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters