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Exam 8: Insuring Your Life

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Question 1

Multiple Choice

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If Mary Lou Thompson selected a life income settlement option with 10 years certain when her husband died,which of the following is(are) true?

A) Mary Lou will receive benefits for the rest of her life.
B) Mary Lou's beneficiaries will receive benefits for 10 years after her death.
C) At least 10 years of benefits will be paid to Mary Lou and perhaps her beneficiaries.
D) a and b
E) a and c

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Question 2

Multiple Choice

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Which of the following forms of life insurance requires the lowest premium per dollar of initial death benefits?

A) universal life
B) whole life
C) variable life
D) term life
E) adjustable whole life

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Question 3

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -Janet Samuels is a single mother with one daughter.Janet would like to purchase enough life insurance to provide the following: If Jane were to die,her daughter would receive $14,400 annually for 12 years from Social Security.She is also the primary beneficiary of Janet's $100,000 group life policy.Given this information,how much more life insurance does Janet need?

Mike had a $100,000 whole life insurance policy with a $10,000 loan outstanding when he died.The policy had a $20,000 cash value prior to the loan.How much will his beneficiary receive following Mike's death?

The underwriting function is designed to be sure that premiums are based on

A participating policy

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement.Select A for the first item,B for the second item,and C if neither item will correctly complete the statement. -People share losses through [loss control | insurance].

Universal life insurance is

Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires to pay in premiums from now on.He has purchased a face value of $100,000 and can accumulate cash value.What type of life insurance has Kurt purchased?

Insurance is a tool that can lessen ____ risk.

A joint life,last-to-die,life insurance is used primarily to help pay estate taxes.

Decreasing term insurance usually has a decreasing face value and

Generally,the period-certain settlement option is desirable because life insurance companies pay higher than average interest rates.

____ is a common provision in many term policies.

Guaranteed renewable term insurance allows you to renew the policy for another term at without qualifying medically.

Marilyn Simms died with a $200,000 life insurance policy.Her husband,Jack,was the primary beneficiary and their children,Mimi (age 24) and Ann (age 30) ,were the contingent beneficiaries.All three survived Marilyn.How would the policy proceeds be distributed?

If the owner of a whole life policy quits paying premiums and gives no instructions to the insurer,what happens?

Underwriters can predict whether or not you will suffer a loss this year.

Using the ____ approach is the most accurate method to determine life insurance needs.

When you stop making premium payments on a whole life policy,the protection is immediately forfeited.