Fundamentals of Insurance - Chapter 7 Exam Questions with Verified Answers (Graded A+)
Beneficiary - Answers in life insurance, the person or legal entity, such as a charity, designated to receive
the death benefit
Cash value - Answers the overpayment that accumulates in a life insurance policy
Contingent (secondary) beneficiary - Answers the person or organization who receives the remaining
death benefits upon survival of the policyholder and the primary beneficiary
Death benefit - Answers the sum of money paid to your beneficiary or beneficiaries by the insurance
company from which you bought the policy
Double indemnity - Answers a rider that doubles the death benefit if the insured dies in an accident
rather than of natural causes
Fixed whole life premiums - Answers premiums that remain constant for the duration of the policy,
which is an entire lifetime
Graded death benefit policy - Answers a policy in which the death benefit is calculated on the amount of
time you live
Insurable interest - Answers represents someone or something of value that, if lost, would cause
financial harm to the insured; those having an insurable interest include family members and business
partners
Life insurance - Answers a legally binding contract between the insurance company and the insured; in
exchange for payment of premiums, the insurer agrees to pay a specified death benefit to the
beneficiary/beneficiaries named in the policy
Life pool - Answers in life insurance, the insurance pool into which premiums collected from
policyholders are placed; death benefits are paid from this pool
Mortality tables - Answers sophisticated statistical averages of how long a person of your age, gender,
ethnic background, and so on, can be expected to live
Mortgage decreasing term - Answers a particular type of decreasing term insurance tied directly to the
policyholder's mortgage interest rate and term and which can be used only to pay off the mortgage
Participating policies - Answers life insurance policies that may pay dividends calculated on the amount
of the of the policy
Permanent insurance - Answers life insurance that covers you for your lifetime or until a specified age,
such as 100, whichever comes first
Primary beneficiary - Answers the person or organization who receives the death benefits first
Beneficiary - Answers in life insurance, the person or legal entity, such as a charity, designated to receive
the death benefit
Cash value - Answers the overpayment that accumulates in a life insurance policy
Contingent (secondary) beneficiary - Answers the person or organization who receives the remaining
death benefits upon survival of the policyholder and the primary beneficiary
Death benefit - Answers the sum of money paid to your beneficiary or beneficiaries by the insurance
company from which you bought the policy
Double indemnity - Answers a rider that doubles the death benefit if the insured dies in an accident
rather than of natural causes
Fixed whole life premiums - Answers premiums that remain constant for the duration of the policy,
which is an entire lifetime
Graded death benefit policy - Answers a policy in which the death benefit is calculated on the amount of
time you live
Insurable interest - Answers represents someone or something of value that, if lost, would cause
financial harm to the insured; those having an insurable interest include family members and business
partners
Life insurance - Answers a legally binding contract between the insurance company and the insured; in
exchange for payment of premiums, the insurer agrees to pay a specified death benefit to the
beneficiary/beneficiaries named in the policy
Life pool - Answers in life insurance, the insurance pool into which premiums collected from
policyholders are placed; death benefits are paid from this pool
Mortality tables - Answers sophisticated statistical averages of how long a person of your age, gender,
ethnic background, and so on, can be expected to live
Mortgage decreasing term - Answers a particular type of decreasing term insurance tied directly to the
policyholder's mortgage interest rate and term and which can be used only to pay off the mortgage
Participating policies - Answers life insurance policies that may pay dividends calculated on the amount
of the of the policy
Permanent insurance - Answers life insurance that covers you for your lifetime or until a specified age,
such as 100, whichever comes first
Primary beneficiary - Answers the person or organization who receives the death benefits first
