Question 1

How many different types of life insurance companies are there?

Accepted Answer

A)  1
B)  2
C)  3
D)  4
E)  5

Question 2

Which of the following does not refer to permanent insurance?

Accepted Answer

A)  Whole life
B)  Straight life
C)  Ordinary life
D)  Cash value life
E)  Term life

Question 3

How does life insurance work? What is its purpose and principle?

Accepted Answer

It works in the following manner.A perso...

Question 4

Insurance experts have estimated that extra costs of up to ________ a year may be required to replace the services of a homemaker in a family with small children.

Accepted Answer

A)  $3,000
B)  $6,000
C)  $10,000
D)  $12,000
E)  $15,000

Question 5

When choosing life insurance,you should consider:

Accepted Answer

A)  the price of the policy.
B)  the financial stability of the insurance company.
C)  the reliability of the insurance company.
D)  the service that the insurance company provides.
E)  All of these

Question 6

One important feature of a whole life policy is the nonforfeiture clause,which prevents the forfeiture of accrued benefits if you choose to drop the policy.

Accepted Answer

A) True 
 B)False

Question 7

The incontestability clause stipulates that the insurance company can dispute the validity of the policy anytime during the insured's lifetime.

Accepted Answer

A) True 
 B)False

Question 8

What are the two basic types of life insurance? Give examples of each.

Accepted Answer

Answers will vary.The two basic types of...

Question 9

Mutual companies issue only nonparticipating policies.

Accepted Answer

A) True 
 B)False

Question 10

Scott Carson wants to determine his life insurance needs.What method would identify his insurance needs as a range between five and ten times his annual income?

Accepted Answer

A)  Multiple of income method
B)  DINK method
C)  Nonworking spouse method
D)  'Family need' method
E)  Sample method

Question 11

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following life insurance policies has a cash value feature?

Accepted Answer

A)  Term life
B)  Group life
C)  Credit life
D)  Whole life
E)  Convertible term

Question 13

Term insurance continues for the entire term even if you stop paying the premiums.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a helpful website with an online calculator to estimate life insurance needs?

Accepted Answer

A)  www.lifehexists.com
B)  www.humanlifecalculator.com
C)  www.lifecalculator.com
D)  www.nerdwallet.com/life-insurance
E)  www.familyneeds.com

Question 15

Define rider and describe three riders commonly attached to life insurance policies.

Accepted Answer

Answers will vary.An insurance company c...

Question 16

Which of the following life insurance policies offers the greatest amount of coverage for the lowest initial premium and is a good choice for young families on a tight budget?

Accepted Answer

A)  Whole life
B)  Straight life
C)  Ordinary life
D)  Cash value life
E)  Term life

Question 17

Which of the following questions are important to consider when choosing an insurance agent?

Accepted Answer

A)  Is your agent available when needed?
B)  Does your agent advise you to have a financial plan?
C)  Is your agent happy to answer questions?
D)  Does your agent keep up with changes in the insurance field?
E)  All of these

Question 18

Even though it is expensive,you should add the accidental death benefit to your life insurance policy,because your chances of dying in the exact manner stated in the policy are very high.

Accepted Answer

A) True 
 B)False

Question 19

Your annual income is $45,000.What is your life insurance need based on the easy method?

Accepted Answer

A)  $220,500
B)  $315,000
C)  $345,000
D)  $400,000
E)  $450,000

Question 20

The DINK method of determining life insurance needs recommends adding an additional insurance cushion if your spouse is:

Accepted Answer

A)  healthy.
B)  employed in an occupation with a certain future.
C)  a non-working spouse.
D)  suffering from poor health.
E)  a senior citizen.

Exam 12: Life Insurance

The incontestability clause stipulates that the insurance company can dispute the validity of the policy anytime during the insured's lifetime.

Correct AnswerverifiedShow Answer

Even though it is expensive,you should add the accidental death benefit to your life insurance policy,because your chances of dying in the exact manner stated in the policy are very high.

Correct AnswerverifiedShow Answer

What are the two basic types of life insurance? Give examples of each.

Correct AnswerverifiedAnswers will vary.The two basic types of...View AnswerShow Answer

The guaranteed insurability option is desirable if you anticipate the need for additional life insurance in the future.

Correct AnswerverifiedShow Answer

Which of the following life insurance policies offers the greatest amount of coverage for the lowest initial premium and is a good choice for young families on a tight budget?

Correct AnswerverifiedShow Answer

Mutual companies issue only nonparticipating policies.

Correct AnswerverifiedShow Answer

Scott Carson wants to determine his life insurance needs.What method would identify his insurance needs as a range between five and ten times his annual income?

Correct AnswerverifiedShow Answer

When choosing life insurance,you should consider:

Correct AnswerverifiedShow Answer

How does life insurance work? What is its purpose and principle?

Correct AnswerverifiedIt works in the following manner.A perso...View AnswerShow Answer

Which of the following is a helpful website with an online calculator to estimate life insurance needs?

Correct AnswerverifiedShow Answer

Which of the following life insurance policies has a cash value feature?

Correct AnswerverifiedShow Answer

One important feature of a whole life policy is the nonforfeiture clause,which prevents the forfeiture of accrued benefits if you choose to drop the policy.

Correct AnswerverifiedShow Answer

Which of the following questions are important to consider when choosing an insurance agent?

Correct AnswerverifiedShow Answer

Define rider and describe three riders commonly attached to life insurance policies.

Correct AnswerverifiedAnswers will vary.An insurance company c...View AnswerShow Answer

Insurance experts have estimated that extra costs of up to ________ a year may be required to replace the services of a homemaker in a family with small children.

Correct AnswerverifiedShow Answer

Which of the following does not refer to permanent insurance?

Correct AnswerverifiedShow Answer

Your annual income is $45,000.What is your life insurance need based on the easy method?

Correct AnswerverifiedShow Answer

How many different types of life insurance companies are there?

Correct AnswerverifiedShow Answer

The DINK method of determining life insurance needs recommends adding an additional insurance cushion if your spouse is:

Correct AnswerverifiedShow Answer

Term insurance continues for the entire term even if you stop paying the premiums.

Correct AnswerverifiedShow Answer

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Answers will vary.The two basic types of...
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It works in the following manner.A perso...
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Correct Answer
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Correct Answer
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Answers will vary.An insurance company c...
View Answer

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Correct Answer
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Correct Answer
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