Finance

Which of the following statements describes how the net payment cost i

Which of the following statements describes how the net payment cost index differs from the surrender cost index? A) Dividends are ignored. B) The cash value is ignored. C) Premiums are not accumulated at a specified interest rate. D) Dividends are not accumulated at a specified interest rate.     ANSWER Answer: B

Read full post

Date: September 19th, 2020

Which of the following statements about the surrender cost index for m

Which of the following statements about the surrender cost index for measuring the cost of life insurance is true? A) It is based on the assumption that the policy will be in force indefinitely. B) It takes into account the settlement options available in the policy. C) It does not consider the cash value in […]

Read full post

Date: September 19th, 2020

Lynn calculated the future value of the first twenty premiums she will

Lynn calculated the future value of the first twenty premiums she will pay under her nonparticipating whole life insurance policy. Then she subtracted the cash value after 20 years. Next, she divided this value by the future value annuity due factor for 20 years to arrive at an annual cost of insurance. Finally, she divided […]

Read full post

Date: September 19th, 2020

Which of the following statements regarding the accidental death benef

Which of the following statements regarding the accidental death benefit rider (also known as double indemnity) is true? A) Adding the accidental death benefit rider doubles the premium for the policy. B) Financial planners agree that adding the accidental death benefit rider is a wise purchase. C) The economic value of a human life is […]

Read full post

Date: September 19th, 2020

Easy Pay Life Insurance Company allows a term insurance rider to be ad

Easy Pay Life Insurance Company allows a term insurance rider to be added to its whole life policies. The result is a policy that offers an increased death benefit with an affordable premium. The general name for such a policy is a(n) A) blended policy. B) indexed policy. C) joint life policy. D) endowment policy. […]

Read full post

Date: September 19th, 2020

If a life insurance policy lapses for nonpayment of premiums, and the

If a life insurance policy lapses for nonpayment of premiums, and the policyholder has not elected another option, which nonforfeiture option usually goes into effect in most policies? A) reduced paid-up insurance B) one-year term insurance C) extended term insurance D) payment of cash value     ANSWER Answer: C

Read full post

Date: September 19th, 2020

Which statement about the incontestable clause is true? I. It protect

Which statement about the incontestable clause is true? I. It protects the beneficiary if the insurer tries to deny a claim years after the policy is issued. II. If protects the insurer from having to pay a claim during the first two years if the insured made a material misrepresentation or concealed material information in […]

Read full post

Date: September 19th, 2020

Marcus is concerned that inflation will erode the purchasing power of

Marcus is concerned that inflation will erode the purchasing power of the face value of his life insurance policy. His agent suggested that Marcus add a provision that allows him to purchase one-year term insurance equal to the percentage change in the consumer price index without having to demonstrate insurability. This provision is called a(n) […]

Read full post

Date: September 19th, 2020

Beth purchased a participating life insurance policy 6 years ago. Her

Beth purchased a participating life insurance policy 6 years ago. Her life insurance needs have increased, but she has developed a medical condition that makes it impossible for her to purchase more life insurance at affordable premiums. Which dividend option makes sense for Beth to use given her medical condition? A) cash B) apply to […]

Read full post

Date: September 19th, 2020