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Exam 11: Life Insurance

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Question 31

Multiple Choice

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Which of the following statements about yearly renewable term insurance is (are) true? I.It requires evidence of insurability for renewal. II.It is most appropriate when an insured needs lifetime protection.

A) I only
B) II only
C) both I and II
D) neither I nor II

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Question 32

Multiple Choice

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A common use of second-to-die life insurance is

A) insuring children.
B) insuring "double income with kids" families.
C) estate planning.
D) insuring key employees of a business.

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Question 33

Multiple Choice

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Which statement is true concerning the economic problem of premature death in the United States? I.The economic impact of premature death of the breadwinner varies for different types of families. II.Increased life expectancy has increased the economic problem of premature death over time.

Which of the following types of families is likely to have the least need for a large amount of life insurance?

Which of the following statements about a variable universal life insurance policy is (are) true? I.There is a minimum guaranteed interest rate for the cash value. II.The policyowner has a variety of investment options for the savings component of the policy.

All of the following statements about universal life insurance are true EXCEPT

The purchase of term insurance is justified by which of the following circumstances? I.The insured wants to save money through the policy for a specific need. II.The insured has a temporary need for life insurance protection.

Carl would like to purchase life insurance.He would also like to invest in a mutual fund.An agent told Carl about a form of life insurance in which Carl could select where the saving component is invested.This form of life insurance has fixed premiums and the cash value is not guaranteed.This type of life insurance is called

All of the following statements about ordinary life insurance are true EXCEPT

All of the following statements about employer-provided group life insurance are true EXCEPT

All of the following statements about current assumption whole life insurance are true EXCEPT

Most family heads need substantial amounts of life insurance.However,with limited income,money spent on life insurance reduces the amount of discretionary income available for other high-priority needs.What an insured person gives up when he or she purchases life insurance instead of using the premium dollars for other purposes is called the

Which of the following statements is true concerning return of premium term insurance? I.The protection provided while the term insurance was in force was free. II.The premium returned does not include the cost of any riders or loadings if the insured was a substandard risk.

Which of the following statements about a decreasing term insurance policy is true?

What is the length of the readjustment period which is considered when the needs approach is used to determine the amount of life insurance to own?

Which of the following statements is true regarding the conversion of a 5-year term policy after it has been in force for 5 years? I.The premium will be lower if an original-age conversion is used. II.The policyowner will have to make a lump-sum adjustment payment if an attained-age conversion is used.

Which of the following statements is (are) true regarding the results of the 2016 study by the Life Insurance Market Research Association (LIMRA) on the adequacy of life insurance owned by households in the United States? I.The average household is adequately insured against the risk of premature death. II.The average household is significantly underinsured against the risk of premature death.

Which of the following statements about indexed universal life insurance is true?

Which of the following statements about the needs approach for estimating the amount of life insurance to purchase is (are) true? I.It involves an analysis of various family needs which must be met if a family breadwinner dies. II.Its use is appropriate only if a person currently has no life insurance protection.

Which of the following statements about life insurance cash values is (are) true? I.Cash values are a result of the level premium method of purchasing life insurance. II.The cash value of a policy must always exceed the policy's legal reserve.