FIN 3310 Ch. 11

flexible premium payments.

All of the following are characteristics of variable life insurance EXCEPT

term life insurance.

All of the following life insurance policies develop a cash value EXCEPT

sandwiched family.

Bob and Tonya are supporting their children, ages 4 and 2. Bob's father is also financially dependent upon Bob and Tonya. This type of family is called a(n)

with outstanding financial obligations.

From an economic perspective, "premature death" is defined as death of a family head

limited-payment whole life insurance

Lynn, age 32, would like to purchase permanent life insurance. She is concerned that premiums may become a burden after she retires. Given her coverage preferences, which of the following life insurance policies is the best policy for Lynn to purchase?

current assumption whole life.

One type of life insurance is a nonparticipating whole life policy in which cash values are based on the insurer's present mortality, investment, and expense experience. An accumulation account is used to reflect the cash value of the policy, and a fixed death benefit and maximum premium level are stated at the time the policy is issued. This type of life insurance is called

convertible

Some term insurance policies permit the policyholder to exchange the policy for a cash value policy without having to demonstrate insurability. Such term insurance policies are described as

readjustment period.

Under the needs approach of determining the amount of life insurance to purchase, one consideration is providing income to the surviving spouse and children during the one- or two-year period following the breadwinner's death. This period is called the

neither I nor II

Which of the following statements is (are) true with respect to the human life value approach? The human life value approach considers all sources of income that the family receives. The human life value approach does not consider the time value of money-future cash flows are not discounted back to present value.

I only

Which of the following statements is (are) true with respect to universal life insurance? Universal life insurance provides premium payment flexibility for the policyholder. Universal life insurance permits the policyholder to select where the cash value is invested.