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Exam 11: Life Insurance

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Question 21

Multiple Choice

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Alex, age 26, purchased a 20-payment whole life insurance policy. After Alex has made 20 premium payments, his life insurance policy is considered

A) matured.
B) reduced.
C) expired.
D) paid-up.

E) A) and C)
F) None of the above

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Question 22

Multiple Choice

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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?

A) continuous premium (ordinary) life
B) whole life paid-up at 65
C) 10-payment whole life
D) 20-payment whole life

E) B) and D)
F) A) and B)

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Question 23

Multiple Choice

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Which of the following statements about re-entry term insurance is true?

Which of the following statements about variable life insurance is true?

The net amount at risk for an ordinary life insurance policy is the difference between the

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.

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

When using the needs approach, several "special needs" should be considered. One special need is money to cover unexpected events, such as major car repairs, dental bills, or home repairs. Money set aside for this purpose is called a(n)

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.

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

All of the following statements about current assumption whole life insurance are true EXCEPT

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 savings component of the policy.

All of the following statements about the conversion of a term policy are true EXCEPT

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

Dave purchased a life insurance policy. The policy is nonparticipating and the cash values are based on the insurer's present mortality, investment, and expense experience. After 2 years, the insurer will recalculate the premium based on the mortality, investment, and expense experience at that time. Dave purchased

Which of the following statements is (are) true regarding the results of the 2014 study by the Life Insurance Market Research Association (LIMRA) 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 statements about variable universal life insurance is (are) true? I.Variable universal life insurance has fixed premium payments. II.Variable universal life insurance allows the policyowner to decide where the premiums are invested.

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

All of the following statements about ordinary life insurance are true EXCEPT