Fin 3330 Exam 3 questions n answers
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The basic purpose of insurance is to - ANS ✔protect you from losses
Insurance is a tool that can lessen ____ risk. - ANS ✔economic
The purchase of insurance is a common form of which risk management technique: - ANS ✔risk
transfer
Underwriting is best described as - ANS ✔activities related to selecting acceptable risks so that
general insurer objectives are met
From the standpoint of the person buying insurance, the central purpose of insurance should
be: - ANS ✔to transfer risks of serious losses
which of the following types of policies is most likely to allow you to switch investments - ANS
✔variable life
Which of the following forms of life insurance requires the lowest premium per dollar of initial
death benefits? - ANS ✔term life
Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires
to pay in premiums from now on. He has purchased a face value of $100,000 and can
accumulate cash value. What type of life insurance has Kurt purchased? - ANS ✔universal life
,Which of the following companies does NOT rate the financial strength of life insurance
companies? - ANS ✔Welch's
if a life insurance policy pays dividends, it is called - ANS ✔participating
The most valuable single technique in personal risk management to assist an individual in
determining how much life insurance is needed is: - ANS ✔Assessing the family's total economic
needs and subtracting financial resources available to meet those needs.
Underwriting helps protect life insurance companies from which of the following: - ANS
✔adverse selection
The probability of a loss occurring can be reduced by - ANS ✔loss prevention
Through insurance, society is able to - ANS ✔reduce financial risks and share losses.
the best way to handle risk is to - ANS ✔use some combination of these
underwriting is - ANS ✔the determination of which exposures to insure
The underwriting function is designed to be sure that premiums are based on - ANS ✔the
chance of loss
The primary purpose of life insurance is to provide - ANS ✔financial security for dependents in
the event of death
Using the ____ approach is the most accurate method to determine life insurance needs. - ANS
✔needs
, The needs approach to determining the amount of life insurance considers - ANS ✔family
income, paying off debts, special financial needs, liquidity
In determining available resources to offset economic needs, you would generally not consider -
ANS ✔earning potential of financially independent children
Term life insurance is characterized by - ANS ✔premium amounts related to age
___ is not a type of term insurance - ANS ✔limited pay
the settlement option chosen by most beneficiaries is - ANS ✔lump sum
___ is a common provision in many term policies - ANS ✔renewable clause
if life insurance is convertible, the policy can be - ANS ✔changed to another type of life
insurance
decreasing term insurance usually has a decreasing face value and - ANS ✔a level premium
Rodney and Toni are a young couple with two small children. They are doing well financially but
their life insurance needs are high and their budget is tight. What type of life insurance will give
them the most protection for their money? - ANS ✔term life
the least expensive form of whole life insurance protection is - ANS ✔straight life
If the objective of your life insurance program is to get the greatest death protection now for
your insurance dollars, you should choose ____ insurance. - ANS ✔term
rated A+
The basic purpose of insurance is to - ANS ✔protect you from losses
Insurance is a tool that can lessen ____ risk. - ANS ✔economic
The purchase of insurance is a common form of which risk management technique: - ANS ✔risk
transfer
Underwriting is best described as - ANS ✔activities related to selecting acceptable risks so that
general insurer objectives are met
From the standpoint of the person buying insurance, the central purpose of insurance should
be: - ANS ✔to transfer risks of serious losses
which of the following types of policies is most likely to allow you to switch investments - ANS
✔variable life
Which of the following forms of life insurance requires the lowest premium per dollar of initial
death benefits? - ANS ✔term life
Kurt purchased a policy with an initial premium of $3,000 and may elect how much he desires
to pay in premiums from now on. He has purchased a face value of $100,000 and can
accumulate cash value. What type of life insurance has Kurt purchased? - ANS ✔universal life
,Which of the following companies does NOT rate the financial strength of life insurance
companies? - ANS ✔Welch's
if a life insurance policy pays dividends, it is called - ANS ✔participating
The most valuable single technique in personal risk management to assist an individual in
determining how much life insurance is needed is: - ANS ✔Assessing the family's total economic
needs and subtracting financial resources available to meet those needs.
Underwriting helps protect life insurance companies from which of the following: - ANS
✔adverse selection
The probability of a loss occurring can be reduced by - ANS ✔loss prevention
Through insurance, society is able to - ANS ✔reduce financial risks and share losses.
the best way to handle risk is to - ANS ✔use some combination of these
underwriting is - ANS ✔the determination of which exposures to insure
The underwriting function is designed to be sure that premiums are based on - ANS ✔the
chance of loss
The primary purpose of life insurance is to provide - ANS ✔financial security for dependents in
the event of death
Using the ____ approach is the most accurate method to determine life insurance needs. - ANS
✔needs
, The needs approach to determining the amount of life insurance considers - ANS ✔family
income, paying off debts, special financial needs, liquidity
In determining available resources to offset economic needs, you would generally not consider -
ANS ✔earning potential of financially independent children
Term life insurance is characterized by - ANS ✔premium amounts related to age
___ is not a type of term insurance - ANS ✔limited pay
the settlement option chosen by most beneficiaries is - ANS ✔lump sum
___ is a common provision in many term policies - ANS ✔renewable clause
if life insurance is convertible, the policy can be - ANS ✔changed to another type of life
insurance
decreasing term insurance usually has a decreasing face value and - ANS ✔a level premium
Rodney and Toni are a young couple with two small children. They are doing well financially but
their life insurance needs are high and their budget is tight. What type of life insurance will give
them the most protection for their money? - ANS ✔term life
the least expensive form of whole life insurance protection is - ANS ✔straight life
If the objective of your life insurance program is to get the greatest death protection now for
your insurance dollars, you should choose ____ insurance. - ANS ✔term
