Chapter 5: Life Basics

All of the following are true regarding viatical settlements, EXCEPT:

Viatical settlements are a type of life insurance contract.

All of the following are personal uses of life insurance, EXCEPT:

Business Financial Relationship

The time period during which children are young and financially dependent upon their parents is termed the:

Family Dependency Period

The ___________ approach calculates the amount of money a person is expected to earn over their lifetime to determine the face amount of life insurance needed, thereby placing a dollar value on the life of an individual.

Human Life Value

Life insurance policies with cash value provide the insured with immediate availability of funds, referred to as:

Liquidity

The ____________ approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities.

Needs

All of the following are true regarding purchase of personal life insurance for charity, EXCEPT:

The person purchasing life insurance for charity must have insurable interest in the lives of the charity's members.

Ben applies for a life insurance policy on himself. How much insurable interest does Ben have in his own life?

Unlimited

When must insurable interest be shown for a life insurance policy?

Upon policy application

The third party that purchases a life insurance policy death benefit from a terminally ill insured is termed:

Viatical Insurance Provider