Question 1

Which value of a life insurance policy does the beneficiary receive upon death of the insured?

Accepted Answer

A)   Cash value
B)   Surrender value
C)   Face value
D)   Market value

Question 2

Most life insurance policies ____ pay out on policies if the insured commits suicide.

Accepted Answer

A)   never
B)   always
C)   partially
D)   may

Question 3

Stock life insurance companies pay a dividend to

Accepted Answer

A)   policyholders.
B)   beneficiaries.
C)   the insured.
D)   shareholders.

Question 4

If all other factors are equal, how will your life insurance needs change after you have paid off your mortgage?

Accepted Answer

A)   They will increase.
B)   They will decrease.
C)   They will remain unchanged.
D)   There's not enough information to know. B

Question 5

In a long-term care insurance policy, the amount of time that the policyholder must pay for long-term care, either from household resources or from Medicare, before the insurance will cover any of the cost is called the

Accepted Answer

A)   benefit period.
B)   waiting period.
C)   benefit amount.
D)   eligibility period. B

Question 6

Which of the following is an ethical life insurance practice?

Accepted Answer

A)   Suggesting you convert a term policy into a whole life policy
B)   Using the highest rates of return in determining expected cash value
C)   Encouraging replacement of an existing cash-value policy with an identical one
D)   Suggesting borrowing from a whole life policy to buy a variable annuity A

Question 7

Compared to property insurance policies, life insurance policies generally have a

Accepted Answer

A)   shorter term.
B)   longer term.
C)   similar term and risk classifications.
D)   similar term but different risk classifications.

Question 8

Insurers estimate a person's risk of dying by using

Accepted Answer

A)   a standardized mortality table.
B)   the insured's family history.
C)   experience in the life insurance business.
D)   a record of that person's diet and exercise habits.

Question 9

Which federally supported program provides long-term care for the elderly that cannot afford institutional services, such as assistance with activities of daily living?

Accepted Answer

A)   Community resources
B)   Medicare
C)   Medicaid
D)   Long-term care insurance

Question 10

An advantage of the income-multiple method to determining how much life insurance is needed is its

Accepted Answer

A)   complexity.
B)   simplicity.
C)   accuracy.
D)   popularity.

Question 11

If a whole life insurance policy has premiums paid over the insured's whole life, this is an

Accepted Answer

A)   limited-payment life insurance.
B)   ordinary life insurance policy.
C)   single-premium whole life insurance.
D)   multi-premium whole life insurance.

Question 12

Which of the following is not a benefit of life insurance?

Accepted Answer

A)   Protection against business losses due to the death of a key person in the business
B)   Protection against household losses
C)   The ability to purchase large amounts of coverage
D)   Protection from creditors for a spouse

Question 13

Which of the following is a criticism of whole life insurance?

Accepted Answer

A)   Higher tax rate than on comparable investments.
B)   Premiums do not increase with age.
C)   Generally low investment returns.
D)   Accumulation of cash value.

Question 14

Under the provisions of the Health Insurance Portability and Accountability Act (HIPAA) , you

Accepted Answer

A)   can get a tax credit for long-term care costs you paid out of pocket.
B)   can get a tax credit for premiums you paid for long-term care insurance.Can take an itemized deduction both for long-term care costs you paid out of pocket and for premiums you paid for long-term care insurance.
C)   cannot take any deductions for long-term care insurance or premiums for long-term care insurance.

Question 15

Long-term care (LTC)  is a term that is broadly used to describe

Accepted Answer

A)   all medical care needed by people that extend beyond their medical insurance coverage.
B)   medical care needed by people that extend beyond one year.
C)   all supportive medical, personal, and social services needed by people who are unable to meet their basic living needs for an extended period of time.
D)   all supportive medical, and personal services needed by people who are unable to meet their basic living needs beyond one year

Question 16

Life insurance policies with an __________ will double the amount of the death benefit if the insured dies as a result of an accident.

Accepted Answer

A)   accelerated living benefit
B)   accidental death benefit
C)   incontestable clause
D)   entire contract clause

Question 17

Hank Johnson named his three kids and nephew as people to whom his life insurance should be paid out upon his death. This is an example of designating _____________.

Accepted Answer

A)   riders
B)   accidental death benefits
C)   beneficiaries
D)   a participating policy

Question 18

Long-term care insurance is a relatively ___ product whose costs to insurers have been fairly ____ to predict.

Accepted Answer

A)   older; easy
B)   new; easy
C)   new; difficult
D)   older; difficult

Question 19

Corey has not paid the premium on his universal life, flexible-premium policy for one month. His insurance company has yet to cancel the policy. Why?

Accepted Answer

A)   He has not passed the two-month free look period.
B)   His policy allows him to use accumulated cash value to cover mortality costs for the period.
C)   His insurance company is too large to notice.
D)   His insurer is a mutual company rather than a stock company.

Question 20

Which life insurance policy will offer the cheapest method to insure your life for $3 million for at least 20 years?

Accepted Answer

A)   Universal life
B)   whole life
C)   Convertible term life
D)   Level-premium term life

Exam 8: Life Insurance and Long-Term Care Planning

Which value of a life insurance policy does the beneficiary receive upon death of the insured?

Correct AnswerverifiedShow Answer

Most life insurance policies ____ pay out on policies if the insured commits suicide.

Correct AnswerverifiedShow Answer

Stock life insurance companies pay a dividend to

Correct AnswerverifiedShow Answer

If all other factors are equal, how will your life insurance needs change after you have paid off your mortgage?

Correct AnswerverifiedB

In a long-term care insurance policy, the amount of time that the policyholder must pay for long-term care, either from household resources or from Medicare, before the insurance will cover any of the cost is called the

Correct AnswerverifiedB

Which of the following is an ethical life insurance practice?

Correct AnswerverifiedA

Compared to property insurance policies, life insurance policies generally have a

Correct AnswerverifiedShow Answer

Insurers estimate a person's risk of dying by using

Correct AnswerverifiedShow Answer

Which federally supported program provides long-term care for the elderly that cannot afford institutional services, such as assistance with activities of daily living?

Correct AnswerverifiedShow Answer

An advantage of the income-multiple method to determining how much life insurance is needed is its

Correct AnswerverifiedShow Answer

If a whole life insurance policy has premiums paid over the insured's whole life, this is an

Correct AnswerverifiedShow Answer

Which of the following is not a benefit of life insurance?

Correct AnswerverifiedShow Answer

Which of the following is a criticism of whole life insurance?

Correct AnswerverifiedShow Answer

Under the provisions of the Health Insurance Portability and Accountability Act (HIPAA) , you

Correct AnswerverifiedShow Answer

Long-term care (LTC) is a term that is broadly used to describe

Correct AnswerverifiedShow Answer

Life insurance policies with an __________ will double the amount of the death benefit if the insured dies as a result of an accident.

Correct AnswerverifiedShow Answer

Hank Johnson named his three kids and nephew as people to whom his life insurance should be paid out upon his death. This is an example of designating _____________.

Correct AnswerverifiedShow Answer

Long-term care insurance is a relatively ___ product whose costs to insurers have been fairly ____ to predict.

Correct AnswerverifiedShow Answer

Corey has not paid the premium on his universal life, flexible-premium policy for one month. His insurance company has yet to cancel the policy. Why?

Correct AnswerverifiedShow Answer

Which life insurance policy will offer the cheapest method to insure your life for $3 million for at least 20 years?

Correct AnswerverifiedShow Answer

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Long-term care insurance is a relatively _ product whose costs to insurers have been fairly __ to predict.

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