Which of the following statements about yearly renewable term insurance is (are) true? I. It requires evidence of insurability for renewal. II. It is most appropriate when an insured needs lifetime protection. A) I only B) II only C) both I and II D) neither I nor II ANSWER Answer: D
Date: September 19th, 2020
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. […]
Date: September 19th, 2020
Which of the following is a noneconomic cost associated with premature death? A) reduction in the standard of living B) loss of a parental role model C) additional expenses, such as uninsured medical bills D) loss of the deceased breadwinner’s future earnings ANSWER Answer: B
Date: September 19th, 2020
Which of the following statements about re-entry term insurance is true? A) It permits the coverage to be renewed an unlimited number of times as long as insurability is demonstrated. B) It permits a refund of premiums paid if the term insurance is renewed a specified number of times. C) It permits a lower renewal […]
Date: September 19th, 2020
Which of the following statements about premature death is (are) true? I. From an economic standpoint, premature means death before a specified age, such as 65. II. The economic problem of problem of premature death in the U.S. has declined substantially over time. A) I only B) II only C) both I and II D) […]
Date: September 19th, 2020
The period during which a surviving spouse is ineligible for Social Security benefits is referred to as the A) emergency period. B) readjustment period. C) dependency period. D) blackout period. ANSWER Answer: D
Date: September 19th, 2020
Tom and Nancy Boyle provide financial support for their two children. In addition, they provide financial support for Tom’s aged father and Nancy’s aged mother. The Boyle family can be described as a A) blended family. B) single-parent family. C) two-income earner family. D) sandwiched family. ANSWER Answer: D
Date: September 19th, 2020
Sarah is using the needs approach to determine how much life insurance to buy. Her cash needs are $30,000; her income needs are $140,000; and special needs are $100,000. Sarah has the following assets: $20,000 in bank accounts, $30,000 in retirement plans, and $40,000 in investment accounts. Sarah owns no individual life insurance. She is […]
Date: September 19th, 2020
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 A) dependency period. B) estate clearance period. […]
Date: September 19th, 2020
Julian, age 45, would like to determine how much life insurance to purchase using the human life value approach. He assumes his average annual earnings over the next 20 years will be $40,000. Of this amount, $20,000 is available annually for the support of his family. Julian will generate this income for 20 more years […]
Date: September 19th, 2020
