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57 Cards in this Set

  • Front
  • Back
Which of the following will be used to determine a term insurance policy
number of people who will die this year
Life insurance premiums are determined basically by the
use of mortality tables
What factors should you consider before you buy insurance?
your present and future sources of income, your savings, group life insurance, and pension benefits
You probably have little or no need for life insurance if you are
a single person living alone or with parents
A two-earner couple may have
a moderate need for life insurance, especially if they have a mortgage
Who has the greatest need for life insurance?
households with small children
Your second step in determining a life insurance program should be to
consider whether you wish to leave your dependants debt free
Which of the following methods can be used to estimate your life insurance req’t
income replacement & family need methods
Which of the following items are required din calculating your life insurance need?
annual income and approx.. expenses, emergency fund, financial needs, and liquid assets
The method of determining life insurance requirements that does not ignore such important factors as emergency funds and your liquid assets is called the
family need method
Which of the following statements is correct for term insurance?
term insurance is protection for a specified period of time
Which statement is correct about whole life insurance?
whole life insurance build ups cash value
A participating life insurance policy has
somewhat higher premiums than nonparticipating policy
If you wanted to pay exactly the same life insurance premium each year, you would choose a
nonparticipating policy
Which type of life insurance plan requires you to pay premiums for a stipulated period, usually 20 or 30 years or until you reach a specified age?
limited payment policy
Subject to certain minimums, which life insurance is designed to let you pay premiums at any time in virtually any amount
universal life
A plan that insures a large number of persons under the terms of a single policy without a medical examination is called a(n) ____________ life insurance policy plan.
group
Which of the following statements is true about group life insurance?
generally the cost of insurance is the same for each employee
A beneficiary
is designated to receive life insurance proceeds
Suicide clause means that the insurance company
will pay the death benefitequal to the amount of the premium paid, if the insured dies during the first 2 years the policy is in force
A document attached to the policy that modifies its coverage by adding or deleting a specified condition is called a(n)
rider
Critical illness benefits are paid
to the policyholder before he or she dies
In planning your insurance program, you should
seek advice from a competent financial adviser, determine what insurance is required, consider social security and other group insurance, and decide what type of insurance best meets your needs
Which of the following is not a common settlement option
variable installment payment
The price that a company charges for a life insurance policy is affected by
the company’s cost of doing business
A factor that affects the cost of a life insurance policy is
the mortality rate
A method of evaluating the cost of life insurance by taking into account the time value of money is called
an interest-adjusted index
What percent of all applicants who apply for life insurance are found to be insurable
98
The prices of life insurance policies
vary considerably
After you buy new life insurance you have a “free look” period of _____ days
10
Because you are young and healthy now, you may overlook the very real need for
disability income insurance
Most health insurance policies issued by health and life insurance companies are sold to
employers, who in turn offer benefits to employees
Which health insurance coverage requires careful shopping because coverage and cost vary from company to company
individual health
Which type of health insurance policy may not cover all of your health insurance needs or may deny benefits if you lose your job?
group health
Which type of insurance provides for the partial replacement of income lost by employees as a result of an accident, illness, etc?
disability income
Which type of insurance is probably the most neglected form of available insurance protection
disability
Which of the following is not an important trade off in purchasing diability income insurance
amount of down-payment
The waiting period in disability income insurance is called ______ period
elimination
Generally, disability income policies with longer waiting periods
have lower premiums
The premium for non-cancelable and guaranteed renewable disability income insurance is higher
but the coverages are well worth the extra cost
Most insurers limit benefits from all sources to no more than ___________ percent of your take-home pay
70-80%
The main diff between whole life insurance and critical illness insurance is that critical illness insurance
pays the proceeds before the policyholder’s death
Critical illness insurance does not usually cover _____________.
blindness
A basic supplementary health and disability insurance plan should
include hospital costs, supplementary prescription drug charges, and dental maintenance
A good supplemental health and disability insurance plan should
offer basic coverage for hospital costs, provide for prescription drug cost not covered by provincial plan, provide for dental maintenance including dentures and oral surgery, and include vision care insurance
Which of the following statements is true of long-term-care insurance
Canadians are generally unaware of its existence
A(n) ________ privides specified benefits regardless of whether the actual expenses are greater or less then the benefits
indemnity policy
Dental expense insurance provides reimbursement for
oral exams, fillings, extractions, inlay
In choosing supplemental health and disability insurance, ideally, you should
get dental and vision plans
You wish to build up a cash surrender value within your life insurance policy. Which of the following types of life insurance would permit you to do so
whole life insurance or Universal life insurance
If you are uncertain whether you will need life insurance beyond the age of 65, which of the following features should you chose?.
conversion option
If you are diagnosed with a life-threatening illness and expect to incur high medical costs before you die, which type of insurance would provide money for your final medical costs?
critical illness insurance
You wish to ensure that your life insurance will not cease once you reach the age of 70. Which types of life insurance would satisfy this need?
whole life insurance, term to 100 insurance, and universal life insurance
Factors that affect the price a company charges for a life insurance policy include
the returns on it’s investments, the mortality rate it expects among its policyholders, the features the policy contains, competition among companies with comparable policies
The whole life policy is an insurance plan for which the policyholder
pays a specified premium each year for as long as she lives, aka straight life policy, aka cash value life policy, aka ordinary life policy
Which of the following is the most common settlement option?
lump-sum payment
The waiting period for disability income insurance is usually __________ after the beginning of the policy.
30-90 days