60 notecards = 15 pages (4 cards per page)
Which of the following types of families is likely to have the least need for a large amount of life insurance?
The human life value is defined as the
Which of the following pieces of information is needed to calculate a person's human life value?
To calculate a human life value, it is necessary to deduct certain costs from a person's average annual earnings. These costs include
All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT
Which of the following statements about the needs approach for estimating the amount of life insurance to purchase is (are) true?
Which of the following is a cost/expense that an estate clearance fund is designed to pay?
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?
Under the needs approach, when is the dependency period of a surviving spouse assumed to end?
The period during which a surviving spouse is ineligible for Social Security benefits is referred to as the
Which of the following statements about premature death is (are) true?
Which of the following statements about re-entry term insurance is true?
Which of the following is a noneconomic cost associated with premature death?
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
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 and he believes that 5 percent is the appropriate interest (discount) rate. The present value of one dollar payable for 20 years at a discount rate of 5 percent is $12.46. What is Julian's human life value?
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
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 covered by a $50,000 group life insurance policy through her employer. Based on this information, how much additional life insurance should Sarah purchase?
Which of the following statements regarding convertible term insurance is true?
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
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)
Most family heads need substantial amounts of life insurance. However, with limited income, money spent on life insurance reduces the amount of discretionary income available for other high-priority needs. What an insured person gives up when he or she purchases life insurance instead of using the premium dollars for other purposes is called the
Which of the following statements about yearly renewable term insurance is (are) true?
What happens to the premiums for yearly renewable term insurance as an insured gets older?
Which of the following statements about term insurance is true?
All of the following statements about the conversion of a term policy are true EXCEPT
Which of the following statements about a decreasing term insurance policy is true?
The purchase of term insurance is justified by which of the following circumstances?
A legal reserve in life insurance is a result of
The net amount at risk for an ordinary life insurance policy is the difference between the
Which of the following statements about life insurance cash values is (are) true?
All of the following statements about ordinary life insurance are true EXCEPT
Which of the following statements about limited-payment life insurance is true?
Which of the following statements about endowment insurance policies is (are) true?
Which of the following statements about variable life insurance is true?
All of the following statements about universal life insurance are true EXCEPT
Which of the following statements about universal life insurance is (are) true?
All of the following statements describe the flexibility available to the owner of a universal life insurance policy EXCEPT
Which of the following statements about a variable universal life insurance policy is (are) true?
All of the following statements about current assumption whole life insurance are true EXCEPT
A whole life insurance policy in which premiums are reduced for an initial period (e.g. 3 years) and are higher thereafter is an example of a
Which of the following statements about policies sold to preferred risks is (are) true?
Which of the following statements about second-to-die life insurance is (are) true?
Which of the following statements about savings bank life insurance is true?
Which of the following statements about home service life insurance, which evolved over time from a type of life insurance called industrial life insurance, is true?
Michael wants to make sure that life insurance proceeds are available to pay his outstanding mortgage balance if he dies. He purchased a type of life insurance in which the amount of coverage gradually declines, just as his outstanding mortgage balance gradually declines. This type of life insurance is called
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
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?
Alex, age 26, purchased a 20-payment whole life insurance policy. After Alex has made 20 premium payments, his life insurance policy is considered
Ann is considering the purchase of a life insurance policy with these characteristics: flexible premium payments, the insurance and savings components are separate, the interest rate credited to the cash value is tied to a changing market interest rate but a minimum interest rate is guaranteed, and a monthly administrative fee is charged. Ann is considering buying
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 $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 variable universal life insurance is (are) true?
I Variable universal life insurance has fixed premium payments.
Which statement is true concerning the economic problem of premature death in the United States?
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?
Which of the following statements is true regarding return of premium term insurance?
The difference between the legal reserve of a whole life policy and the face amount of insurance is the
Gwen purchased an interesting life insurance policy. A minimum interest rate is guaranteed on the cash value, but additional interest may be credited based on the investment performance of a group of common stocks. There is also a cap on the additional interest credited to the policy. Based on this information, what type of life insurance did Gwen purchase?
A common use of second-to-die life insurance is
Which of the following statements about indexed universal life insurance is true?
All of the following statements about employer-provided group life insurance are true EXCEPT