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Your annual income is $35,000.What is your life insurance need based on the easy method?


A) $35,000
B) $110,500
C) $171,500
D) $191,500
E) over $200,000

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Jim Brown has a life insurance policy that allows him to change his policy to fit his changing needs.He can change either the premium he pays or the period of coverage.What type of insurance does Jim likely have?


A) Ordinary whole life
B) Limited payment life
C) Variable life
D) Adjustable life
E) Universal life

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Group life and credit life insurance are generally permanent forms of insurance.

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Which statement is correct regarding mutual life insurance companies?


A) Mutual insurance companies have stockholders.
B) Nearly all mutual companies issue only nonparticipating policies.
C) Premiums are lower than those offered by stock companies.
D) Mutual companies do not pay policy dividends.
E) A mutual company refunds part of the premium to its policyholders.

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


A) Group life has been losing its popularity recently.
B) The cost of insurance per $1,000 is the same for each employee, regardless of age.
C) Group insurance is not a good bargain for older employees.
D) Principles that apply to other forms of insurance do not apply to group life insurance.
E) Group life is never considered the same thing as term life insurance.

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Francesca Brown has a life insurance policy that provides her with protection for the next five years.However,she can get five more years of protection at the end of this term without having to have a medical examination because she will be less than 70 years old at that time.Her premiums will rise during each five-year period.What type of term life insurance does Francesca likely have?


A) Straight
B) Renewable
C) Convertible
D) Decreasing
E) Accelerated

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Catherine Carey has made the choice to stay home and raise her three kids while her husband works.She wants to determine her insurance needs.What method was specifically designed for someone in her situation?


A) Easy method
B) DINK method
C) Nonworking spouse method
D) Family need method
E) Soccer mom method

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Under the Multiple of Income method of estimating life insurance needs,what important factor is excluded from the calculation?


A) annual income
B) your current employer
C) future earnings
D) past earnings
E) current assets

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Accelerated benefits are life insurance policy proceeds paid to the policyholder,who is terminally ill,before he or she dies.

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Stock life insurance companies are owned by their policyholders.

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A method of evaluating the cost of life insurance by taking into account the time value of money combines all of the following except:


A) premium payments.
B) dividends.
C) supply and demand.
D) cash-value buildup.
E) present value analysis.

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You probably have little or no need for life insurance if you are:


A) a single person living with your parents.
B) divorced and have two children.
C) married and your spouse works.
D) gainfully employed.
E) a two-earner household with a mortgage.

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Which method of determining life insurance needs is designed specifically for a working couple with no dependents?


A) The multiple of income method
B) Easy method
C) "Nonworking" spouse method
D) Family need method
E) DINK method

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The cash values of a ____________ life insurance policy fluctuate according to the yields earned by a separate fund,which can be a stock fund,a money market fund,or a bond fund.


A) modified
B) variable
C) adjustable
D) ordinary
E) temporary

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Permanent insurance can be limited payment,variable,adjustable,or universal life insurance.

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According to a survey by Salary.com,the equivalent wage of a stay-at-home mom is approximately how much?


A) $54,000
B) $89,000
C) $100,000
D) $119,000
E) $120,000

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Life insurance is available from a wide range of private and public sources.

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Most life insurance companies are mutuals.

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

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The two basic types of life insurance ar...

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A suicide clause means that the insurance company:


A) can cancel the policy if suicide is proven.
B) will pay the death benefit equal to the amount of the premium paid, if the insured dies by suicide during the first two years that the policy is in force.
C) will pay only half the death benefits if the insured commits suicide.
D) automatically pays the premium out of the policy's cash value.
E) will not pay any death benefits if suicide is suspected.

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