LIFE INSURANCE

If a person purchases a twenty-year endowment insurance policy and pays on it for twenty years, at the end of that time he may collect a value based upon his age.

False

Which of the following two statements are true of ordinary whole-life insurance policies?

Ordinary whole life insurance has some value as an investment. The insured pays premiums on this type of insurance until his death.

Term insurance covers the insured for the stated term of the policy.

True

Whole-life insurance has a cash value for the insured person if he decides to stop paying premiums and cash the policy in.

True

Use the chart above to determine the premium for 10-year term insurance. $10,000 policy for a 35-year-old male. Premium = _____?

Work : Find age 35 on chart and then find out the # for 10 year term insurance. Next divided $10,000 by 1,000 which equals 10. Take 10 times 6.11, which is the # under 10 year term insurance for a 35 year old male. Answer: $61.10

Use the chart above to determine the premium for 10 year term insurance. $12,000 policy for a 35-year-old female. Premium = _____?

Work: Take 35 year minus 3, because she is a female. Find the 10 year term insurance # for a 32 year old. Next, divide 12,000 divided by 10 which is 12. Then take 12 times 5.29 which is the # under ten year term insurance for a 32 year old person. Answer: $63.48

face value

amount of a policy stated on the insurance policy

premium

amount of money paid for insurance

benefit

amount paid to a survivor upon the death of an insured person

quarterly

four times a year, or every three months

annually

once a year

insured

person covered by the insurance

beneficiary

survivor to whom the benefits are paid upon the death of an insured person

The least expensive type of life insurance is _____.

term insurance

semiannually

twice a year, or every six months