1 Premature Death Loss Exposures

Among the costs associated with premature death, probate costs would be categorized as: -Unpaid long-term obligations -Estate planning costs -Outstanding debts -Lost income

-Estate planning costs

A sandwiched family usually needs life insurance because the premature death of an income earner in a sandwiched family can cause Select one: A. Financial hardship for surviving children and surviving parents. B. Financial hardship for extended relatives who must assume responsibility for their grandparents. C. Emotional and financial hardship for surviving children who might witness grandparents dependent on Medicare. D. Loss of an estate to surviving children when grandparents must "spend down" assets to become eligible for Medicaid.

A. Financial hardship for surviving children and surviving parents. CorrectCorrect. Financial hardship for surviving children and parents.

All of the following are costs associated with premature death, EXCEPT: Select one: A. Reduction in standard of living B. Financial assets of the deceased C. Additional costs for child-care expenses D. Grief of a surviving spouse

B. Financial assets of the deceased CorrectCorrect. Financial assets of the deceased

Which one of the following best describes the likely life insurance needs of a family with two working spouses and dependent children? Select one: A. Life insurance on the spouse with the higher income B. Life insurance on both spouses C. Life insurance on both spouses and the children D. Life insurance on both spouses and school-age children

B. Life insurance on both spouses

Costs associated with premature death include all of the following, EXCEPT: Select one: A. Funeral expenses, probate and estate settlement costs, and childcare expenses for young dependent children B. Social Security and income taxes for any IRA, 401(k), or similar retirement investments C. Unpaid college tuition for children D. Outstanding financial payments to debtors for unsecured loans

B. Social Security and income taxes for any IRA, 401(k), or similar retirement investments CorrectCorrect. Social Security and income taxes for any IRA, 401(k), or similar retirement investments

In which one of the following family structures is the risk of incurring child-care costs over a prolonged period a unique consideration in establishing life insurance needs? Select one: A. Sandwiched family B. Traditional family C. Blended family D. Single-parent family

C. Blended family

Regarding insuring the premature death loss exposure, which one of the following statements is true? Select one: A. In two-income families without children, life insurance is generally not needed. B. In single-parent families, the need for life insurance is not great since there is no surviving spouse. C. In a traditional family structure, the need for life insurance on the spouse that stays at home can be as important as the need for life insurance on the spouse in the labor force. D. In two-income families with children, life insurance is generally needed only on the spouse with the higher income.

C. In a traditional family structure, the need for life insurance on the spouse that stays at home can be as important as the need for life insurance on the spouse in the labor force. CorrectCorrect. In a traditional family structure, the need for life insurance on the spouse that stays at home can be as important as the need for life insurance on the spouse in the labor force.

One of the costs associated with premature death that can be addressed with life insurance is Select one: A. Loss of Social Security retirement benefits if the deceased was less than 55 years old at the time of death. B. Missing potential benefits to society that might have been derived from the deceased's future efforts. C. Loss of companionship experienced by the extended family members. D. A family's reduction in the standard of living because of insufficient replacement income.

D. A family's reduction in the standard of living because of insufficient replacement income. CorrectCorrect. A family's reduction in the standard of living because of insufficient replacement income.

Which one of the following best describes the likely life insurance needs of a single person with no dependents or outstanding financial obligations? Select one: A. An extensive amount of whole life insurance as an investment for retirement B. A moderate amount of term insurance to benefit family members C. A moderate amount of term insurance for charitable donations D. A modest amount of life insurance for funeral expenses and uninsured medical bills

D. A modest amount of life insurance for funeral expenses and uninsured medical bills CorrectCorrect. A modest amount of life insurance for funeral expenses and uninsured medical bills