Question 1

Suppose you are a typical family.Your annual income is $70,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (for 7 years)

Accepted Answer

A)  $260,000.
B)  $344,000.
C)  $375,000.
D)  $400,000.
E)  $490,000.

Question 2

Which statement is correct about whole life insurance?

Accepted Answer

A)  Whole life insurance is cheaper than term life.
B)  Policy holders overpay in the later years of the policy.
C)  Whole life premiums increase with your age.
D)  Whole life insurance is the best choice for most people.
E)  Whole life insurance builds up cash value.

Question 3

At what age have 13.21% of Canadian males died?

Accepted Answer

A)  20 years
B)  35 years
C)  50 years
D)  65 years
E)  75 years

Question 4

The waiting period in disability income insurance is called ____________ period.

Accepted Answer

A)  Exclusion
B)  no benefit
C)  Coverage
D)  trade-off
E)  Elimination

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Subject to certain minimums, which life insurance is designed to let you pay premiums at any time in virtually any amount?

Accepted Answer

A)  universal life
B)  ordinary life
C)  whole life.
D)  adjustable life
E)  variable life

Question 7

Critical insurance illness usually provides money for care if you are diagnosed with a serious illness such as AIDS.

Accepted Answer

A) True 
 B)False

Question 8

Even though it is expensive, you should consider the accidental death benefit in a life insurance policy.

Accepted Answer

A) True 
 B)False

Question 9

The waiting period for disability income insurance benefits is usually _________ after the beginning of the policy.

Accepted Answer

A)  0 days (no waiting period) 
B)  10 days
C)  15 days
D)  30 to ninety days
E)  365 days

Question 10

The accidental death benefit is often called double indemnity.

Accepted Answer

A) True 
 B)False

Question 11

Life insurance needs may be used to:

Accepted Answer

A)  Go on vacation
B)  Provide a retirement income
C)  Buy a car
D)  Buy a home
E)  Retire

Question 12

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Accepted Answer

A) True 
 B)False

Question 13

The "free-look" period allows you to cancel your life insurance without penalty anytime within _________ day(s)

Accepted Answer

A)  one
B)  ten
C)  thirty
D)  sixty
E)  ninety

Question 14

If you wish to pay exactly the same premium each year, you would choose a participating policy.

Accepted Answer

A) True 
 B)False

Question 15

You wish to ensure that your life insurance will not cease once you reach the age of 70.Which types of life insurance would satisfy this need? I Whole Life Insurance
II Term-to-100 Insurance
III Universal Life Insurance
IV Declining Term Insurance

Accepted Answer

A)  I and II only
B)  I, II and III only
C)  IV only
D)  I, III and IV only
E)  1 and IV only

Question 16

Life insurance premiums are determined basically by the

Accepted Answer

A)  forces of supply.
B)  forces of demand.
C)  forces of competition.
D)  use of mortality tables.
E)  guesswork of insurance executives.

Question 17

Factors that affect the price a company charges for a life insurance policy include

Accepted Answer

A)  the returns on its investments
B)  the mortality rate it expects among its policyholders
C)  the features the policy contains
D)  competition among companies with comparable policies
E)  all these factors affect the price a company charges for a life insurance policy

Question 18

Which of the following statements is true about group life insurance?

Accepted Answer

A)  Group life has been losing its popularity recently.
B)  Generally the cost of insurance is the same for each employee.
C)  Group insurance is not a good bargain for older employees regardless of age.
D)  Principles that apply to other forms of insurance do not apply to group life insurance.
E)  Not worth getting.

Question 19

Suppose you are a typical family.Your annual income is $60,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (use 7 years)

Accepted Answer

A)  $245,000.
B)  $294,000.
C)  $345,000.
D)  $400,000.
E)  $450,000.

Question 20

Suppose you are a typical family.Your annual income is $80,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (for 7 years)

Accepted Answer

A)  $345,000.
B)  $392,000.
C)  $445,000.
D)  $400,000.
E)  $560,000.

Exam 9: Life, Health, and Disability Insurance

Suppose you are a typical family.Your annual income is $80,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (for 7 years)

Correct AnswerverifiedShow Answer

Critical insurance illness usually provides money for care if you are diagnosed with a serious illness such as AIDS.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A term insurance policy pays a benefit only if you die during the period that the policy covers.

Correct AnswerverifiedShow Answer

The waiting period in disability income insurance is called ____________ period.

Correct AnswerverifiedShow Answer

Subject to certain minimums, which life insurance is designed to let you pay premiums at any time in virtually any amount?

Correct AnswerverifiedShow Answer

Which of the following statements is true about group life insurance?

Correct AnswerverifiedShow Answer

Life insurance premiums are determined basically by the

Correct AnswerverifiedShow Answer

If you wish to pay exactly the same premium each year, you would choose a participating policy.

Correct AnswerverifiedShow Answer

Which statement is correct about whole life insurance?

Correct AnswerverifiedShow Answer

Even though it is expensive, you should consider the accidental death benefit in a life insurance policy.

Correct AnswerverifiedShow Answer

Suppose you are a typical family.Your annual income is $60,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (use 7 years)

Correct AnswerverifiedShow Answer

The "free-look" period allows you to cancel your life insurance without penalty anytime within _________ day(s)

Correct AnswerverifiedShow Answer

Factors that affect the price a company charges for a life insurance policy include

Correct AnswerverifiedShow Answer

You wish to ensure that your life insurance will not cease once you reach the age of 70.Which types of life insurance would satisfy this need? I Whole Life Insurance II Term-to-100 Insurance III Universal Life Insurance IV Declining Term Insurance

Correct AnswerverifiedShow Answer

The accidental death benefit is often called double indemnity.

Correct AnswerverifiedShow Answer

The waiting period for disability income insurance benefits is usually _________ after the beginning of the policy.

Correct AnswerverifiedShow Answer

Life insurance needs may be used to:

Correct AnswerverifiedShow Answer

At what age have 13.21% of Canadian males died?

Correct AnswerverifiedShow Answer

Suppose you are a typical family.Your annual income is $70,000.Use the income replacement method to determine your need for life insurance.Your insurance should be in the amount of (for 7 years)

Correct AnswerverifiedShow Answer

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