week 12 Learn

How many parts are there in a typical insurance application?

2

The grace period typically allows a lapse of Blank______ to pay the premium payment.

28 to 31 days

The easy method is based on the assumption that it will take ____ years to adjust to financial consequences of death.

7

If a spouse has an unstable job or poor health, then the _____ method may not be the best option. (Answer with the acronym.)

DINK

The ____ insurance method is for families with no children.

DINK

The ____ method is used for families with simple insurance needs that have no dependents.

DINK

True or false: A term life insurance policy is one in which policyholders pay the same premium each year as long as they live.

False

True or false: If there are teenage children, the DINK method can typically be reduced.

False

Records covering many years and including millions of lives have been combined into tables called the Blank______.

Standard Ordinary Mortality Table

True or false: In the first part of the insurance application, you state your name, sex, policy desired, and other information, and in the second part you give your medical history.

True

True or false: Life insurance is one of a few ways to provide income and liquidity at the time of death.

True

Which of the following is important when buying life insurance?

Understand your policy. Inform your beneficiaries. Make sure your company is licensed in your state.

When considering life insurance, what questions should you ask?

When would you like to retire? How much money do you want to leave? How much are you able to pay?

The nonworking spouse method takes into consideration the cost of replacing the services of Blank______.

a housekeeper a child care provider a cook

Group insurance plans insure a large number of people under the terms of Blank______.

a single policy

A document attached to a policy that _____ its coverage is called a rider.

alters

Regardless of whom you purchase insurance from, make sure that the company and employees are licensed in your ____

area

Term life insurance is a(n) _____ life insurance option.

basic

An insurance company, in order to get your business needs, must:

be licensed in your state

A person designated to receive something, such as life insurance proceeds, from the insured is called a(n) Blank______.

beneficiary

For most consumers, term life insurance is considered to be the Blank______.

best value

The amount received after giving up a whole life type of insurance policy is called the Blank______.

cash value

Life insurance is important, but can also be very

costly

In order for your beneficiary to redeem the policy, they will need to have your Blank______ certificate and your insurance policy.

death

One factor that affects the price of a life insurance policy is the rate of death among policyholders, also called ___ rate

death

A traditional life insurance policy pays the beneficiaries of the policyholder at the time of ____, whereas an endowment policy pays the insured if he or she is alive on the ____ date named in the policy.

death maturity

Insurance companies look at which of the following as guidelines for preferred rates:

driving records family history cholesterol levels

Which method uses an equation of 70% of your salary for seven years?

easy method

Insurance protection is available from the following sources Blank______.

employers government agencies labor unions professional organizations

The DINK method is useful if your spouse earns an income that is _____ to yours

equal

The limited installment payment option allows for the payment of life insurance to be paid in Blank______ periodic installments for a specified number of years after your death.

equal

One of the main factors when determining which companies to buy policies from is whether or not the company is ___ strong

financially

When looking to buy insurance, you should purchase from a company that is:

financially strong.

When considering life insurance, you should consider present and _____ sources of income.

future

The Standard Ordinary Mortality Table of 2001 was originally structured based on age and ______.

gender

Cash value is the amount the policyholder _____ after giving up a life incurance policy

gets

One question to ask when considering life insurance is "how much money you would like to ____ to your dependents"?

give

Which household has the highest need for life insurance?

households with small children

Life insurance is:

important and costly.

A provision stating that the insurer cannot dispute the validity of a policy after a specific period is called a(n) Blank______.

incontestability clause

In insurance, an example of a risk-sharing group is a(n):

insurance company.

If you wish to continue your existing term life insurance coverage, the easiest method is if your policy:

is renewable.

A group insurance plan insures a(n) _____ number of people under the terms of a single policy without requiring ____ examinations

large medical

Which type of insurance provides liquidity at the time of death?

life

Which option pays beneficiaries in equal, periodic installments for a specified number of years after the death of the insured?

limited installment payment

Cash-value policies are good for people who must be forced to save and for those who plan to keep the policy for the _____ term

long

Costs not associated with replacing the services of a nonworking spouse include:

lost wages for time away from work for the surviving spouse

A life insurance policy is valuable only if it meets your ____

needs

Which of the following factors should be considered before buying life insurance?

net worth group life insurance present and future income

Life insurance that does not provide policy dividends is also called a nonpar, or Blank______ policy.

nonparticipating

The Blank______ method takes into consideration the cost of replacing services, such as child care, housekeeping, and cooking.

nonworking spouse

Jim has what some would call "the best life insurance policy on the market," but it does not meet his objectives. Therefore, to Jim this policy is Blank______.

not valuable

Term life insurance provides protection for a specific ____ of time

period

Cash-value policies are good for people who:

plan to keep the policy long term. must be forced to save.

Life insurance is when a person joins a risk-sharing group known as an insurance company and purchases a contract also called an insurance ____

policy

Insurance protection is available from several ____ and ____ sources

public private

Nonparticipating life insurance policies do not provide annual policy ____

refunds

With a ___ option, you can continue your existing term coverage for the next period without a medical reexamination.

renewable

A document attached to a policy that modifies its coverage is called a(n) Blank______.

rider

Life expectancy in the United States has been steadily ______.

rising

Cash-value policies provide a death benefit and a(n) _____ account

savings

When buying life insurance policies, you should:

shop around and compare costs.

Households with ____ children have the greatest need for life insurance.

small

Life expectancy in the United States has been Blank______.

steadily increasing

Life insurance protection for a specified period of time is called Blank______.

term

Universal life is a whole life policy that combines _____ life insurance and ____ elements

term investment

For fairly young people, ______ life insurance is less expensive than ____ life insurance. These are one-word answers.

term whole

An incontestability clause states that the insurer cannot dispute the _____ of a policy after a specific ____ of time.

terms period

Which of the following are factors that affect the price of an insurance policy?

the return on investments the costs of doing business the mortality rate it expects among policyholders

Insurance providers are tightening their guidelines for who gets coverage.

true

True or false: A beneficiary is a person designated to receive something, such as life insurance proceeds.

true

True or false: If you have not paid your premium by the end of the grace period, your policy lapses.

true

A whole life policy that combines term insurance and investment elements is called Blank______.

universal life

The DINK method may not be the best method for couples who have Blank______.

unstable income a spouse in poor health

An endowment life insurance policy pays the policyholder money at the maturity date, whereas a traditional policy pays the beneficiaries Blank______.

upon death of the insured

If anyone suffers from poor health or there are more than two children under the age of 13, the nonworking spouse method should be adjusted Blank______.

upward

Under the ____ annuity option, payments vary monthly based on changes in investment returns.

variable

If you are the beneficiary of a policy, it is most important to know Blank______.

where the policy is kept

A plan where the policyholder pays the same premium for as long as they live is called a(n):

whole life policy.

For the nonworking spouse method, extra costs not considered include the surviving spouse's time away from their ____ to care for their family.

work