U.E.T Taxila

COURSE TITLE : FREE 101

TRUE/FALSE QUESTIONS(1 TO 22)

Chapter 10

1)Purchasing a life insurance policy is a basic and inexpensive task.

2. Life insurance benefits may be used to pay off a home mortgage or other debts at the time of death.

3. The sooner a person is likely to die, the lower the premiums he or she will pay.

4. Life expectancy for men is longer than that for women.

5. All individuals need life insurance.

6. The "Nonworking" spouse method of estimating life insurance includes factors such as Social Security and liquid assets.

7. The "Family Need" method of estimating life insurance includes factors such as Social Security and liquid assets.

8. Mutual life insurance companies specialize in the sale of nonparticipating policies.

9. Another name for straight term is renewable return-of-premium term.

10. Decreasing term pays less to the beneficiary as time passes.

11. Return-of-Premium term pays out all premiums plus interest to a beneficiary.

12. A Limited Payment Policy is a whole life policy that requires premiums to be paid for a certain period.

13. Premium payments are fixed with a Variable Life Policy.

14. The beneficiaries of someone who dies by suicide will never be eligible to receive any benefits from his or her life insurance policy. 

15. Competition among companies with comparable policies can affect the price a company charges for life insurance.

16. An interest-adjusted index is a method of evaluating the cost of life insurance by taking into account the time value of money.

17. The lower the interest-adjusted index, the lower the cost of a life insurance policy.

18. If you change your mind about your insurance policy, you have 60 days to return it to receive a refund of your premium.

19. The most common settlement option for a life insurance program is the lump-sum payment.

20. If you switch life insurance policies, you will automatically still be insurable.

21. Annuities are most beneficial for individuals who expect to live only a short time.

22. An investment in an annuity is the same as an investment in a certificate of deposit.

23. A person who is named to receive the benefits from an insurance policy is a(n)

24. Most people buy life insurance to

25. Which of the following households most likely has the greatest need for life insurance?

26. Judy and James have a four year-old child. They plan to purchase life insurance using the formula: Current income × 7 × 70 percent. Which method are they using to determine their life insurance needs?

27. Jeff and Erica have two children. They plan to purchase life insurance using the formula: (18 - youngest child's age) × $10,000. Which method are they using to determine their life insurance needs?

28. Donald and Charlene are married and do not have any children. Each plans to continue to work after the other one dies. Which method are they using to determine their life insurance needs?

29. Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. Which method are they using to determine their life insurance needs?

30. About                       percent of the U.S. life insurance companies are stock companies?

31. You want to purchase a life insurance policy that pays a dividend. What kind of policy would you want to purchase?
32. Todd plans to purchase a life insurance policy from a stock life insurance company. What kind of policy would he plan to purchase?

33. Jeanne wants to purchase a life insurance policy with guaranteed premiums. What kind of policy would she want to purchase?

34. Another name for temporary life insurance is:

35. Which of the following is NOT a type of permanent insurance?

36. Another name for permanent life insurance is:

37. Which of the following is NOT temporary insurance?

38. If you want to purchase term insurance, you will receive all of the following except

39. Which of the following is NOT a type of permanent life insurance?

40. If you have a renewable term policy,

41. If you have a multiyear level term policy,

42. If you have a conversion term policy,

43. This term life policy will guarantee that you will pay the same premium for the duration of your policy

44. Another name for a straight term policy is

45. Which of the following is NOT a feature of whole life insurance?

46. What is the most positive feature of whole life insurance listed below?

47. Megan wants to purchase a life insurance policy that will allow her to invest in stock. Which of the following policies should she buy?

48. Molly is thinking about buying a life insurance policy, but she is not sure about how much she will need in the next few years. Which of the following policies would meet her needs?

49. Polly wants the opportunity to change the amount she pays for her annual premium through the life of her insurance policy without changing her coverage. Which of the following policies would meet her needs?

50. Pam just started working at XYZ Widget Company and finally wants to get insurance coverage. She does not want to take a medical exam to get coverage because she has some underlying health conditions and is concerned that she might not qualify for a policy. Which of the following life insurance policies should she apply for?

51. Which of the following is a poor choice for the amount of protection offered for an individual?

52. Wendy has had a life insurance policy for five years. She was recently divorced. Which of the following provisions should she take action on?

53. Which of the following provisions requires the policyholder to pay overdue premiums with interest in order to have coverage?

54. Fred bought life insurance when he was 47, although he told the insurance company that he was

42. He has since died. Which of the following provisions will affect the amount of money his beneficiaries will receive?

55. Georgia was supposed to pay her premium by the 15th of the month. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium?

56. Fred bought life insurance five years ago. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original misrepresentation?

57. The policy loan provision means that A.

58. Amy bought a life insurance policy and named Ben as her beneficiary. She has since died. Who will receive the benefits from her policy?

59. Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. Which of the following riders should she consider?

60. Bill is worried about being able to pay his premium if he is totally and permanently disabled before age 60. Which of the following riders should he consider?

61. Frank, age 38, was hit by a car and died. Which of the following riders provided an additional benefit for his heirs?

62.          A young employee is buying individual life insurance and is worried about the impact inflation will have on his life insurance coverage. Which of the following riders should he consider?

63. Mildred was diagnosed with terminal cancer and knows that she doesn't have long to live. Which of the following riders would allow her to receive cash now?

64. What is the most important part of an insurance agent's job?

65. Which of the following is NOT important when buying life insurance?

66.          Which of the following is NOT a factor that affects the price a company charges for a life insurance policy?

67. All of the following are major rating agencies for insurance except

68. After you purchase a life insurance contract, you have a "free-look" period that lasts

69. The settlement option that pays the life insurance proceeds in equal periodic payments for a specified number of years after your death is called

70. The settlement option that pays the life insurance proceeds to the beneficiary for as long as she or he lives is called

71. The settlement option in which the company acts as trustee and pays interest to the beneficiary is called

72. Which of the following products allows an individual to receive payments beginning now?

73. Which of the following statements is correct?

74. Which of the following statements is INCORRECT? .

75. Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life?

76. Which of the following allows an individual to receive an amount of income that will change based on the income received from investments over a certain period of time, or over his or her life?

77. Which of the following statements is correct?

78. Annuities are often purchased for A. 401(k)

79. The Tax Reform Act of 1986

80. Stephanie is the wage earner in a "typical family" with $30,000 gross annual income. Use the Easy Method to determine how much insurance she should carry.