Finance Quiz #10
Holly and Matt want to use the "nonworking" spouse method to determine the amount of life insurance coverage they need. If their two children are ages 9 and 5 years old, how much do they need?
$130,000
Frank, age 38, was killed in a car accident. Which of the following riders provided an additional benefit for his heirs?
Accidental death benefit
Molly is thinking about buying a type of whole life insurance policy, but she is not sure about how much she will need in the next few years. She may need to change her coverage as her needs change. Which of the following policies would meet her needs?
Adjustable life
Which of the following is a charge you will pay when you purchase a variable annuity?
All of these.
Which of the following statements is incorrect?
An annuity is more advisable for people in poor health than for those who are likely to live longer than average.
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
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
Which of the following is NOT a feature of whole life insurance?
The policy will return all premiums if you survive to the end of the policy.
Francisco and Maria have three children and want to complete a detailed worksheet to determine the amount of life insurance they need to purchase. They will consider factors such as Social Security and liquid assets. Which method are they using to determine their life insurance needs?
Family need method
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
Which of the following annuities is purchased with a lump-sum payment and allows an individual to receive income payments beginning now?
Immediate annuity
Polly wants the opportunity to change the amount she pays for her annual premium through the life of her insurance policy without changing her coverage. Which of the following types of whole life policies would meet her needs?
Universal 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
If you have a multiyear level term policy,
Your premium will be the same for the duration of your policy.
Stephanie is the wage earner in a "typical family" with $40,000 gross annual income. Use the easy method to determine how much insurance she should carry.
$196,000
Which of the following allows an individual to receive a fixed amount of income over a certain period of time, or over his or her life?
Fixed annuity
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.
Fred bought life insurance when he was 47, although he told the insurance company that he was 42. He has since died. Which of the following provisions will affect the amount of money his beneficiaries will receive?
Misstatement of age provision
Marianne and Roger are in good health and have reasonably secure careers. Each earns $45,000 annually. They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans. If one should die, they think that funeral expenses would be $12,000. What is their total insurance need using the DINK method?
$98,000
Pam just started working at XYZ Widget Company and finally wants to get insurance coverage through her employer. She does not want to take a medical exam to get coverage, because she has some underlying health conditions and is concerned that she might not qualify for a policy. Which of the following life insurance policies should she apply for?
Group life
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
This life insurance is used to pay off certain debts, such as auto loans, in the event that you die before the debts are paid in full. Which of the following is not the best buy for the amount of protection offered for an individual?
Credit life
If you have a conversion term policy,
You can convert your term policy to a permanent policy.
Amy bought a life insurance policy and named Ben as her beneficiary. Amy still lives with her parents who provide some of her living expenses. She has since died. Who will receive the benefits from her policy?
Ben.
Fred bought life insurance five years ago. He forgot to tell them that he had a heart condition, and, as a result of that condition, he recently died. Which of the following provisions prevents the life insurance company from refusing to pay his beneficiaries because of his original fraudulent misrepresentation?
Incontestability clause
When considering why to buy annuities, which of the following statements is correct?
It is better to fully fund your IRA, Keogh, or 401(k) before buying an annuity.
The settlement option that pays the life insurance proceeds to the beneficiary for as long as she or he lives is called
Life income option.
This term life insurance policy will guarantee that you will pay the same premium for the duration of your policy.
Multiyear level term
The settlement option in which the company acts as trustee and pays interest to the beneficiary is called
Proceeds left with the company.
Which of the following is NOT a type of permanent insurance?
Term life
Georgia was supposed to pay her premium by the 15th of the month. Which of the following provisions allows her to keep her coverage if she is a couple of weeks late with paying her premium (without penalty)?
The grace period