LOMA 281 Module 2 Exam 2025
Questions and Answers
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 - ✔✔B
Financial needs life insurance can meet - ✔✔- 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 - ✔✔Life insurance that provides a death benefit only if the insured
dies during the period specified in the policy.
level term life insurance - ✔✔Term life insurance that provides a policy benefit that
remains the same over the term of the policy.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,Decreasing Term Life Insurance - ✔✔Term life insurance that provides a policy benefit
that decreases in amount over the term of coverage
Mortgage Insurance - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,Credit Life Insurance - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, 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 - ✔✔A.
Return of Premium (ROP) - ✔✔A form of term life insurance that provides a death
benefit if the insured dies during the term of coverage and promises a return of
premiums if the insured does not die during the term of coverage.
Renewable Term Insurance - ✔✔Term life insurance that gives the policyowner the
option to continue the policy's coverage at the end of the specified term without
presenting evidence of insurability.
Evidence of insurability - ✔✔Proof that a given person is an insurable risk.
Suppose Carter buys a renewable term insurance policy. Do you think he can renew the
policy as many times as he wants?
a. Yes
b. No
c. Can't tell. Need more information. - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
Questions and Answers
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 - ✔✔B
Financial needs life insurance can meet - ✔✔- 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 - ✔✔Life insurance that provides a death benefit only if the insured
dies during the period specified in the policy.
level term life insurance - ✔✔Term life insurance that provides a policy benefit that
remains the same over the term of the policy.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,Decreasing Term Life Insurance - ✔✔Term life insurance that provides a policy benefit
that decreases in amount over the term of coverage
Mortgage Insurance - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
,Credit Life Insurance - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔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 - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
, 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 - ✔✔A.
Return of Premium (ROP) - ✔✔A form of term life insurance that provides a death
benefit if the insured dies during the term of coverage and promises a return of
premiums if the insured does not die during the term of coverage.
Renewable Term Insurance - ✔✔Term life insurance that gives the policyowner the
option to continue the policy's coverage at the end of the specified term without
presenting evidence of insurability.
Evidence of insurability - ✔✔Proof that a given person is an insurable risk.
Suppose Carter buys a renewable term insurance policy. Do you think he can renew the
policy as many times as he wants?
a. Yes
b. No
c. Can't tell. Need more information. - ✔✔B.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 4
