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Exam 11: Life Insurance

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Question 21

Multiple Choice

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Which of the following is a cost/expense that an estate clearance fund is designed to pay?

A) burial expenses
B) retiring the mortgage
C) education costs
D) income to the widow(er) during the readjustment period

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Question 22

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What is the length of the readjustment period which is considered when the needs approach is used to determine the amount of life insurance to own?

A) 3 to 6 months
B) 1 to 2 years
C) until the youngest child reaches age 18
D) until the surviving spouse reaches age 65

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Question 23

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Which of the following statements about limited-payment life insurance is true?

Tamara purchased a term insurance policy when she had high life insurance needs and limited income.Now Tamara can afford whole life insurance.What term life insurance provision will permit Tamara to switch her term insurance to whole life insurance without having to show that she is still insurable?

Jessica is an agent for LMN Life Insurance Company.She met with Brad,who was interested in purchasing life insurance.Jessica explained the various uses of life insurance,including income for Brad's wife during the 1- or 2-year period following Brad's death.This period is known as the

Which of the following types of families is likely to have the least need for a large amount of life insurance?

Which of the following statements about second-to-die life insurance is (are) true? I.The insurance is a form of endowment coverage. II. The premium is lower than the combined cost of purchasing a life insurance policy on each insured.

Disadvantages of the capital retention approach include which of the following? I.Assets are often liquidated too quickly. II.It underestimates the amount of life insurance needed.

Which of the following statements is (are) true regarding the results of studies by LIMRA and New York Life Insurance Company on the adequacy of life insurance owned by households in the United States? I.The average household is adequately insured against the risk of premature death. II.The average household is significantly underinsured against the risk of premature death.

Which of the following $100,000 whole life insurance policies,issued by the same company to a man age 32,would require the highest first-year premium?

Which of the following statements about industrial life insurance (also called home service life insurance) policies is true?

Which of the following statements about a variable universal life insurance policy is (are) true? I. There is a minimum guaranteed interest rate for the cash value. II.The policyowner has a variety of investment options for the investment of premiums.

Bill is attempting to determine how much life insurance to purchase.He has two dependent children and his wife does not work outside of the home.An advisor suggested that Bill should consider Social Security benefits when doing his life insurance planning.One concern in this regard is the period after Social Security benefits to a widow terminate until they resume again.This period is called the

All of the following statements describe the flexibility available to the owner of a universal life insurance policy EXCEPT

Under the needs approach,when is the dependency period of a surviving spouse assumed to end?

Which of the following statements about policies sold to preferred risks is (are) true? I.Preferred risks are people whose mortality experience (deaths per thousand at a given age) is expected to be more favorable than average. II.Insurers require preferred risks to purchase at least a minimum amount of life insurance,such as $250,000.

The human life value is defined as the

Which of the following statements about a decreasing term insurance policy is true?

The difference between the legal reserve of a whole life policy and the face amount of insurance is the

Carl would like to purchase life insurance.He would also like to invest in a mutual fund.An agent told Carl about a form of life insurance in which Carl could select where the saving component is invested.This form of life insurance has fixed premiums and the cash value is not guaranteed.This type of life insurance is called