Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

You can purchase life insurance from two types of life insurance companies.

Accepted Answer

A) True 
 B)False

Question 3

The premium for a whole life policy increases with your age.

Accepted Answer

A) True 
 B)False

Question 4

Because the premium payment period for a limited payment policy is shorter than that of a whole life policy,the annual premium is higher.

Accepted Answer

A) True 
 B)False

Question 5

Nearly all mutual companies issue only nonparticipating policies.

Accepted Answer

A) True 
 B)False

Question 6

Who has the greatest need for life insurance?

Accepted Answer

A)  Households with small children
B)  Singles living alone
C)  Singles living with parents
D)  Dual income couple
E)  Retired personF) C) and D)
G) A) and D)

Question 7

Usually,there is no time limit on reinstatement of a lapsed life insurance policy.

Accepted Answer

A) True 
 B)False

Question 8

The insurance industry rule of thumb that a typical family will need 70% of salary for seven years in order to adjust for the financial consequences of a wage-earner's death is known as which of the following estimation methods?

Accepted Answer

A)  Nonworking spouse
B)  Easy method
C)  DINK method
D)  Family need
E)  Soccer momF) C) and D)
G) A) and D)

Question 9

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Accepted Answer

A) True 
 B)False

Question 10

Using the Multiple of Income Method to estimate insurance needs,what is the minimum amount of insurance needed for Susan Smith if her current income is $50,000?

Accepted Answer

A)  $50,000
B)  $100,000
C)  $150,000
D)  $200,000
E)  $250,000F) A) and C)
G) B) and E)

Question 11

The cost-of-living protection rider is designed to help prevent inflation from eroding the purchasing power of the protection your policy provides.

Accepted Answer

A) True 
 B)False

Question 12

The premium that is refunded to policyholders of a participating policy is called the policy dividend.

Accepted Answer

A) True 
 B)False

Question 13

When your life insurance objectives change,you should review the policy carefully and discuss its provisions with your agent.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)  Whole life
B)  Ordinary life
C)  Universal life
D)  Adjustable life
E)  Variable lifeF) D) and E)
G) A) and E)

Question 15

When buying life insurance,you should:

Accepted Answer

A)  buy from an unlicensed company.
B)  buy more life insurance than you need.
C)  select an agent who is incompetent.
D)  ask about lower premium rates for nonsmokers.
E)  not worry about reading and understanding your policy.F) A) and E)
G) C) and D)

Question 16

The cash values of a variable life insurance policy increase at a constant rate over time.

Accepted Answer

A) True 
 B)False

Question 17

In a participating policy,a part of the premium is refunded to the policyholder annually.

Accepted Answer

A) True 
 B)False

Question 18

If you have no dependents and your spouse earns as much as you do,you have simple insurance needs.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Using the Multiple of Income Method to estimate insurance needs,what amount of insurance is needed if your current income is $100,000?

Accepted Answer

A)  100,000
B)  100,000-300,000
C)  500,000-800,000
D)  600,000-900,000
E)  over 1,000,000F) A) and D)
G) A) and E)

Exam 12: Life Insurance

If you have no dependents and your spouse earns as much as you do,you have simple insurance needs.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When buying life insurance,you should:

Correct AnswerverifiedShow Answer

Using the Multiple of Income Method to estimate insurance needs,what amount of insurance is needed if your current income is $100,000?

Correct AnswerverifiedShow Answer

Usually,there is no time limit on reinstatement of a lapsed life insurance policy.

Correct AnswerverifiedShow Answer

In a participating policy,a part of the premium is refunded to the policyholder annually.

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

The insurance industry rule of thumb that a typical family will need 70% of salary for seven years in order to adjust for the financial consequences of a wage-earner's death is known as which of the following estimation methods?

Correct AnswerverifiedShow Answer

When your life insurance objectives change,you should review the policy carefully and discuss its provisions with your agent.

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 premium that is refunded to policyholders of a participating policy is called the policy dividend.

Correct AnswerverifiedShow Answer

Who has the greatest need for life insurance?

Correct AnswerverifiedShow Answer

An annuity is a financial contract written by an insurance company to provide you with a regular income.

Correct AnswerverifiedShow Answer

You can purchase life insurance from two types of life insurance companies.

Correct AnswerverifiedShow Answer

Because the premium payment period for a limited payment policy is shorter than that of a whole life policy,the annual premium is higher.

Correct AnswerverifiedShow Answer

The cash values of a variable life insurance policy increase at a constant rate over time.

Correct AnswerverifiedShow Answer

Nearly all mutual companies issue only nonparticipating policies.

Correct AnswerverifiedShow Answer

The cost-of-living protection rider is designed to help prevent inflation from eroding the purchasing power of the protection your policy provides.

Correct AnswerverifiedShow Answer

The premium for a whole life policy increases with your age.

Correct AnswerverifiedShow Answer

Using the Multiple of Income Method to estimate insurance needs,what is the minimum amount of insurance needed for Susan Smith if her current income is $50,000?

Correct AnswerverifiedShow Answer

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