Reference no: EM133051945

1. The feature that allows an insured to swap a term policy in the future for a whole life policy is designated:

a. Convertible swap
b. Convertible term
c. Swap term
d. Flexible swap
e. None of the choices are correct.

2. Which of the following is not a major type of insurance policy?

a. Government
b. All of these are major types of insurance policies
c. Private personal
d. Limited renewal
e. Private property

3. Which of the following is not a strength associated with a whole life policy?

a. The policy is designed to commonly pay a cash benefit to the beneficiary in contrast to term's less frequent payout as temporary insurance
b. The premiums remain level over time and thus aren't unaffordable in later years 4.
c. Higher payments than needed to cover mortality risk are an effective "forced savings" component for those who need it
d. None of these are strength associated with a whole life policy
e. All of these are strengths associated with a whole life policy

4. Which of the following is not an advantage of an individual insurance policy?

a. Tax advantages
b. Flexibility and portability are not advantages
c. Portability
d. All of these are advantages
e. Flexibility

5. What is the third step of the risk management process?

a. None of the choices are correct.
b. Identify available risk management tools.
c. Implement.
d. Match appropriate risk management tools to exposure.
e. Establish exposure.

6. Which of the following is an approach used to asses the amount of insurance needed?

a. None of these are approach
b. Revenue enhancement
c. Partial replacement
d. Private insurance needs
e. All of these are approaches

7. What are search costs?

The costs that the insured individual incurs when attempting to collect cash from the insurance company
None of the choices are correct.
Costs that the insurance company incurs to attract clients
Costs that the person desiring to be insured undertakes to find out which policy is best
Overhead costs

8. Which of the following is not part of an insurance policy?

Mortality charge
All of these are parts of an insurance policy
Investment return
None of these are a part of an insurance policy
Liability expense

9. Which of the following is an adjustment required for a needs analysis?

a. Future education costs for children
b. A decline in overall living costs caused by the reduction in household members
c. Repayment of the mortgage to reduce overhead costs and insurance needs resulting from a decline in overall living costs
d. All of the choices are correct.
e. None of the choices are correct.

10. When a household revises its portfolio, it attempts to establish a risk/return strategy that:

a. Minimizes portfolio risk as much as possible while maintaining the current standard of living
b. Will not lead to an audit by the tax authorities
c. All of the choices are correct.
d. Optimizes portfolio income and brings about the highest standard of living possible
e. None of the choices are correct.

11. For what does medigap insurance pay?

a. Assistance at home
b. The portion of medical expenses not covered by the government
c. Payments to a nursing home
d. None of the choices are correct.
e. The portion of medical expenses covered by the government