CA life and Health: Life Insurance Basics Exams Questions with complete solutions

A family's need for income is greatest during the - ANSWER-Family Dependency Period Time after the insured has died, leaving a surviving spouse with dependent children to support. Which of the following would be least likely to be considered a legitimate need that would be paid by insurance proceeds? - ANSWER-Vacation travel expenses THere are many legitimate need-based expenses that can be paid by life insurance proceeds, from groceries to retirement income. Vacation expenses are most likely to be considered a luxury and not a need. Which of the following is NOT a type of information that needs to be gathered in order to determine the value of someone's life when using the needs approach? A. Outstanding debt B. Mortgages C. Expenses D. Estimated longevity - ANSWER-D. Estimated Longevity There are four main types of information that an insurer needs to obtain in order to determine the value of some's life: debt status, income, mortgage, and expenses. Longevity is not a factor in the personal financial planing process. What falls in the category of costs associated with death? - ANSWER-Costs would take into account final medical expenses the insured, funeral expenses, and a day to day expenses of maintaining the family including rent or mortgage payments, car payments, utilities, groceries, etc.