LOMA 281 CERTIFICATION EVALUATION
QUESTIONS AND SOLUTIONS PREMIUM
REVIEW MATERIAL
●● Financial needs life insurance can meet
Answer: - paying household expenses
- covering outstanding debts
- Paying outstanding medical, hospital, and funeral expenses,
- providing financial support for the family
- funding a child's education
●● Term Life Insurance
Answer: Life insurance that provides a death benefit only if the insured
dies during the period specified in the policy.
●● level term life insurance
Answer: Term life insurance that provides a policy benefit that remains
the same over the term of the policy.
●● Decreasing Term Life Insurance
Answer: Term life insurance that provides a policy benefit that decreases
in amount over the term of coverage
,●● Mortgage Insurance
Answer: A plan of decreasing term insurance designed to provide a
benefit amount that corresponds to the decreasing amount owed on a
mortgage loan.
●● When Michael bought a house, he obtained a mortgage loan from the
Archway Bank. He also bought a mortgage insurance policy from Able
Life.
Is Archway Bank a party to Michael's mortgage insurance contract with
Able Life?
a. yes
b. no
Answer: B.
●● Who can Michael name as the beneficiary of his mortgage insurance
policy?
a. His Wife Only
b. Archway Bank Only
c. His Wife, Archway Bank, or Someone Else
Answer: C.
,●● If Michael names his wife as the policy beneficiary, does she have to
use the policy proceeds to repay the mortgage loan?
a. yes
b. no
Answer: B.
●● Credit Life Insurance
Answer: A type of term life insurance designed to pay the balance due
on a loan if the borrower dies before the loan is repaid.
●● Family Income Coverage
Answer: A plan of decreasing term life insurance that provides a stated
monthly income benefit amount if the insured dies during the term of
coverage.
●● Increasing Term Life Insurance
Answer: Term life insurance that provides a death benefit that starts at
one amount and increases by some specified amount or percentage at
stated intervals over the policy term.
●● Decide whether the statements below describe increasing term
insurance, level term insurance, or decreasing term insurance.
, A 5-year term life insurance policy that offers a death benefit of $50,000
for the first year of the policy term, $40,000 for the second year, and so
on. The benefit for the fifth year is $10,000.
a. Increasing Term Insurance
b. Level Term Insurance
c. Decreasing Term Insurance
Answer: C.
●● A 5-year term life insurance policy that provides a $100,000 death
benefit if the insured dies at any time during the 5-year policy term.
a. increasing term insurance
b. level term insurance
c. decreasing term insurance
Answer: B.
●● A 5-year term life insurance policy that pays a $100,000 benefit
during the policy's first year, a $105,000 benefit during the second year,
and so on. The benefit during the fifth year is $120,000.
Increasing term insurance
Level term insurance
Decreasing term insurance
QUESTIONS AND SOLUTIONS PREMIUM
REVIEW MATERIAL
●● Financial needs life insurance can meet
Answer: - paying household expenses
- covering outstanding debts
- Paying outstanding medical, hospital, and funeral expenses,
- providing financial support for the family
- funding a child's education
●● Term Life Insurance
Answer: Life insurance that provides a death benefit only if the insured
dies during the period specified in the policy.
●● level term life insurance
Answer: Term life insurance that provides a policy benefit that remains
the same over the term of the policy.
●● Decreasing Term Life Insurance
Answer: Term life insurance that provides a policy benefit that decreases
in amount over the term of coverage
,●● Mortgage Insurance
Answer: A plan of decreasing term insurance designed to provide a
benefit amount that corresponds to the decreasing amount owed on a
mortgage loan.
●● When Michael bought a house, he obtained a mortgage loan from the
Archway Bank. He also bought a mortgage insurance policy from Able
Life.
Is Archway Bank a party to Michael's mortgage insurance contract with
Able Life?
a. yes
b. no
Answer: B.
●● Who can Michael name as the beneficiary of his mortgage insurance
policy?
a. His Wife Only
b. Archway Bank Only
c. His Wife, Archway Bank, or Someone Else
Answer: C.
,●● If Michael names his wife as the policy beneficiary, does she have to
use the policy proceeds to repay the mortgage loan?
a. yes
b. no
Answer: B.
●● Credit Life Insurance
Answer: A type of term life insurance designed to pay the balance due
on a loan if the borrower dies before the loan is repaid.
●● Family Income Coverage
Answer: A plan of decreasing term life insurance that provides a stated
monthly income benefit amount if the insured dies during the term of
coverage.
●● Increasing Term Life Insurance
Answer: Term life insurance that provides a death benefit that starts at
one amount and increases by some specified amount or percentage at
stated intervals over the policy term.
●● Decide whether the statements below describe increasing term
insurance, level term insurance, or decreasing term insurance.
, A 5-year term life insurance policy that offers a death benefit of $50,000
for the first year of the policy term, $40,000 for the second year, and so
on. The benefit for the fifth year is $10,000.
a. Increasing Term Insurance
b. Level Term Insurance
c. Decreasing Term Insurance
Answer: C.
●● A 5-year term life insurance policy that provides a $100,000 death
benefit if the insured dies at any time during the 5-year policy term.
a. increasing term insurance
b. level term insurance
c. decreasing term insurance
Answer: B.
●● A 5-year term life insurance policy that pays a $100,000 benefit
during the policy's first year, a $105,000 benefit during the second year,
and so on. The benefit during the fifth year is $120,000.
Increasing term insurance
Level term insurance
Decreasing term insurance
