LOMA 281 Module 2 Study Questions
and Answers Graded A+ 2026
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 -Correct Answer ✔-B
Financial needs life insurance can meet -Correct 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 -Correct Answer ✔-Life insurance that provides a death
benefit only if the insured dies during the period specified in the policy.
level term life insurance -Correct Answer ✔-Term life insurance that provides a
policy benefit that remains the same over the term of the policy.
Decreasing Term Life Insurance -Correct Answer ✔-Term life insurance that
provides a policy benefit that decreases in amount over the term of coverage
Mortgage Insurance -Correct 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 -Correct 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 -Correct 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 -Correct Answer ✔-B.
Credit Life Insurance -Correct 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 -Correct 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 -Correct 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 -Correct 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 -Correct 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 -Correct Answer ✔-A.
Return of Premium (ROP) -Correct Answer ✔-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 -Correct Answer ✔-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 -Correct Answer ✔-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. -Correct Answer ✔-B.
Suppose Blythe renews her $100,000 20-year renewable policy at the end of the
policy term. Do you think the amount of coverage is automatically cut in half to
$50,000?
a. Yes
b. No
c. Can't tell. Need more information. -Correct Answer ✔-B.
Attained Age -Correct Answer ✔-The age an insured has reached (attained) on a
specified date.
Convertible Term Insurance -Correct Answer ✔-Term life insurance that gives the
policyowner the right to convert the term policy to a cash value life insurance
policy without providing evidence of insurability.
Conversion Period -Correct Answer ✔-The specified period of time following
policy issue during which the owner of a convertible term life insurance policy can
convert the coverage to cash value life insurance.
Assume Blythe Owens purchased a convertible term insurance policy instead of a
renewable term policy. During the conversion period, Blythe's health declined to
the point where she would no longer be considered insurable. Can Blythe convert
her term policy to a cash value policy?
a. Yes
b. No
c. Can't tell. Need more information. -Correct Answer ✔-A.
attained age conversion -Correct Answer ✔-A conversion of a term life insurance
policy to a cash value life insurance policy in which the premium rate for the cash
and Answers Graded A+ 2026
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 -Correct Answer ✔-B
Financial needs life insurance can meet -Correct 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 -Correct Answer ✔-Life insurance that provides a death
benefit only if the insured dies during the period specified in the policy.
level term life insurance -Correct Answer ✔-Term life insurance that provides a
policy benefit that remains the same over the term of the policy.
Decreasing Term Life Insurance -Correct Answer ✔-Term life insurance that
provides a policy benefit that decreases in amount over the term of coverage
Mortgage Insurance -Correct 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 -Correct 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 -Correct 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 -Correct Answer ✔-B.
Credit Life Insurance -Correct 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 -Correct 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 -Correct 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 -Correct 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 -Correct 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 -Correct Answer ✔-A.
Return of Premium (ROP) -Correct Answer ✔-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 -Correct Answer ✔-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 -Correct Answer ✔-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. -Correct Answer ✔-B.
Suppose Blythe renews her $100,000 20-year renewable policy at the end of the
policy term. Do you think the amount of coverage is automatically cut in half to
$50,000?
a. Yes
b. No
c. Can't tell. Need more information. -Correct Answer ✔-B.
Attained Age -Correct Answer ✔-The age an insured has reached (attained) on a
specified date.
Convertible Term Insurance -Correct Answer ✔-Term life insurance that gives the
policyowner the right to convert the term policy to a cash value life insurance
policy without providing evidence of insurability.
Conversion Period -Correct Answer ✔-The specified period of time following
policy issue during which the owner of a convertible term life insurance policy can
convert the coverage to cash value life insurance.
Assume Blythe Owens purchased a convertible term insurance policy instead of a
renewable term policy. During the conversion period, Blythe's health declined to
the point where she would no longer be considered insurable. Can Blythe convert
her term policy to a cash value policy?
a. Yes
b. No
c. Can't tell. Need more information. -Correct Answer ✔-A.
attained age conversion -Correct Answer ✔-A conversion of a term life insurance
policy to a cash value life insurance policy in which the premium rate for the cash
