Chapter 8
Nonforfeiture rights guarantee that a policy owner will not lose his or her policy's _____.
cash value
Insurance is a tool that can reduce one's _____ risk.
economic
The primary purpose of life insurance is to provide:
financial security for dependents in the event of death.
Families faced with the loss of a principal wage earner receive Social Security benefits _____.
from the government that are intended to provide basic, minimum support
A(n) _____ policy is a contract between an individual and a company under which the company agrees to reimburse the individual for losses suffered by him or her according to specified terms.
insurance
Term life insurance is characterized by _____.
premium amounts related to the age of the insureds
____ involves abstaining from any activity that will affect an individual financially
risk avoidance
The purchase of insurance is a common form of _____ by the insured.
risk transfer
The _____ method is the most accurate method of determining the amount of life insurance coverage needed for an individual.
the Needs analysis method
Underwriting refers to _____:
the determination of which exposures to insure.
Insurance underwriting is best described as:
the process used by insurers to decide who can be insured and to determine applicable rates that will be charged for premiums
The basic purpose of insurance is to _____.
protect yourself from economic losses
Which of the following policy features allows the insured to increase coverage periodically without showing proof of insurability?
Guaranteed purchase option
Which of the following is a characteristic of a universal life insurance policy?
No choice in how the accumulation account is invested
Group life insurance is:
an insurance that provides a master policy for a group.