LOMA 281 Module 2 with Complete Solutions

LOMA 281 Module 2 with Complete Solutions Which type of whole life insurance policy will best be able to give Arabella lifetime protection without straining her retirement income? Single-premium whole life policy Limited-payment whole life policy Continuous-premium whole life policy - Answer-B 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 a. increasing term insurance b. level term insurance c. decreasing term insurance - Answer-A.