BUSINESS INSURANCE (WebCE) EXAM TUTOR
QUESTIONS AND ANSWERS A+ GRADED.
All the following statements about term life insurance are correct EXCEPT:
It offers protection for a specified, limited period.
A small cash value gradually accumulates while the policy is in force.
Upon issue, it is generally less expensive than permanent insurance of
comparable face amount.
It pays a benefit only if the insured dies during the specified period.
✔✔a small cash value gradually accumulates while the policy is in force
A type of life insurance that covers two people and pays the death benefit
only upon the second insured's death is called
survivorship life
family life
spousal life
joint life
✔✔survivorship life
Under a joint life insurance policy, when does the insurer pay the death
benefit?
when the first insured dies
only when the surviving insured dies
only when the older insured dies
,only when the younger insured dies
✔✔when the first insured dies
Which of the following types of whole life insurance is paid with one
premium at the time the policy is bought?
modified premium whole life
limited pay life
graded premium whole life
single-premium life
✔✔single-premium life
Which of the following life insurance products is best suited for insuring a
mortgage or other long-term loan with the least premium possible?
increasing term life insurance
level term life insurance
decreasing term life insurance
whole life insurance
✔✔decreasing term life insurance
A married couple is insured under a joint life policy. The first spouse dies.
What can the surviving spouse do with the policy?
The surviving spouse can renew the policy.
The surviving spouse can convert the policy if he or she proves
insurability.
,The surviving spouse may convert the policy without proving insurability.
The surviving spouse cannot convert the policy.
✔✔the surviving spouse can convert the policy if he or she proves
insurability
Alan and his wife are expecting their first child. Alan wants the most
death protection that he can get for the smallest amount of premium, at
least while he's starting his family. Ideally, he would like to be able to
upgrade his coverage to a whole life policy at some point. Which of the
following products would you recommend?
whole life insurance policy
variable life insurance policy
universal life policy
ten-year convertible term life policy
✔✔ten-tear convertible term life policy
Michael and his friends and family, who are tired of paying high
premiums for their individual policies, decide to get together and buy a
group life insurance policy. Why will their approach not work?
Group policies are only available to employers.
Family members cannot be covered under the same group policy.
A group cannot be formed just for the purpose of obtaining insurance.
None of the members in the group is a licensed agent.
✔✔a group cannot be formed just for the purpose of obtaining insurance
, While completing an application for a life insurance policy, Dan discloses
his partial blindness. The insurer will treat this blindness as a:
peril
moral hazard
morale hazard
physical hazard
✔✔physical hazard
Peril vs Hazard
✔✔Peril is the CAUSE of loss
Hazard is a characteristic that increases the chance of a peril occurring
Which of the following best illustrates risk transfer?
Anita buys health insurance to protect herself in case of serious illness.
Abigail continues to rent her home because she thinks homeowners
insurance is too expensive. Refusing to buy a home and insure it is an
example of risk avoidance.
Anne does not venture out after dark because she is afraid of being
assaulted.
Arlene decides not to purchase life insurance because she has no
dependents and plenty of cash in her savings accounts to cover any final
expenses.
✔✔Anita buys health insurance to protect herself in case of a serious
illness
QUESTIONS AND ANSWERS A+ GRADED.
All the following statements about term life insurance are correct EXCEPT:
It offers protection for a specified, limited period.
A small cash value gradually accumulates while the policy is in force.
Upon issue, it is generally less expensive than permanent insurance of
comparable face amount.
It pays a benefit only if the insured dies during the specified period.
✔✔a small cash value gradually accumulates while the policy is in force
A type of life insurance that covers two people and pays the death benefit
only upon the second insured's death is called
survivorship life
family life
spousal life
joint life
✔✔survivorship life
Under a joint life insurance policy, when does the insurer pay the death
benefit?
when the first insured dies
only when the surviving insured dies
only when the older insured dies
,only when the younger insured dies
✔✔when the first insured dies
Which of the following types of whole life insurance is paid with one
premium at the time the policy is bought?
modified premium whole life
limited pay life
graded premium whole life
single-premium life
✔✔single-premium life
Which of the following life insurance products is best suited for insuring a
mortgage or other long-term loan with the least premium possible?
increasing term life insurance
level term life insurance
decreasing term life insurance
whole life insurance
✔✔decreasing term life insurance
A married couple is insured under a joint life policy. The first spouse dies.
What can the surviving spouse do with the policy?
The surviving spouse can renew the policy.
The surviving spouse can convert the policy if he or she proves
insurability.
,The surviving spouse may convert the policy without proving insurability.
The surviving spouse cannot convert the policy.
✔✔the surviving spouse can convert the policy if he or she proves
insurability
Alan and his wife are expecting their first child. Alan wants the most
death protection that he can get for the smallest amount of premium, at
least while he's starting his family. Ideally, he would like to be able to
upgrade his coverage to a whole life policy at some point. Which of the
following products would you recommend?
whole life insurance policy
variable life insurance policy
universal life policy
ten-year convertible term life policy
✔✔ten-tear convertible term life policy
Michael and his friends and family, who are tired of paying high
premiums for their individual policies, decide to get together and buy a
group life insurance policy. Why will their approach not work?
Group policies are only available to employers.
Family members cannot be covered under the same group policy.
A group cannot be formed just for the purpose of obtaining insurance.
None of the members in the group is a licensed agent.
✔✔a group cannot be formed just for the purpose of obtaining insurance
, While completing an application for a life insurance policy, Dan discloses
his partial blindness. The insurer will treat this blindness as a:
peril
moral hazard
morale hazard
physical hazard
✔✔physical hazard
Peril vs Hazard
✔✔Peril is the CAUSE of loss
Hazard is a characteristic that increases the chance of a peril occurring
Which of the following best illustrates risk transfer?
Anita buys health insurance to protect herself in case of serious illness.
Abigail continues to rent her home because she thinks homeowners
insurance is too expensive. Refusing to buy a home and insure it is an
example of risk avoidance.
Anne does not venture out after dark because she is afraid of being
assaulted.
Arlene decides not to purchase life insurance because she has no
dependents and plenty of cash in her savings accounts to cover any final
expenses.
✔✔Anita buys health insurance to protect herself in case of a serious
illness
