Fin Chapter 10
Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. If their youngest child is 5 years old, how much do they need?
$130,000
Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the "nonworking" spouse method?
$140,000
Tim and Tammy are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the easy method?
$343,000
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?
Accelerated benefits
Frank, age 38, was killed in a car accident. Which of the following riders provided an additional benefit for his heirs?
Accidental death benefit
Which of the following is NOT a factor that affects the price a company charges for a life insurance policy?
All of these affect the price.
Which of the following is a charge you will pay when you purchase a variable annuity?
All of these.
A person who is named to receive the proceeds from a life insurance policy is a(n)
Beneficiary.
If you want to purchase term insurance, you will receive all of the following except
Cash value.
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?
Cost-of-living protection
Bonnie is most concerned about being able to buy additional insurance without undergoing medical exams. Which of the following riders should she consider?
Guaranteed insurability option
Of the following, which one is the most positive feature of whole life insurance for a person who wants a more structured way to save?
It builds cash value.
The settlement option that pays the life insurance proceeds in equal periodic installments for a specified number of years after your death is called
Limited installment payment.
Which of the following provisions requires the policyholder to again qualify as an acceptable risk and pay overdue premiums with interest in order to put a lapsed policy back in force?
Policy reinstatement
Most people buy life insurance to
Protect the people who depend on the insured from financial losses caused by his or her death.
Which of the following is NOT a type of permanent insurance?
Term life
Megan wants to purchase a type of whole life insurance policy that will allow part of her premium to be invested in stock, bonds, or money market funds. Which of the following policies should she buy?
Variable life
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?
Waiver of premium disability benefit
Which of the following is NOT temporary insurance?
Whole life
If you have a multiyear level term policy,
Your premium will be the same for the duration of your policy.
