C.23 Life insurance (individual and group)

Question 1

Which of the following types of life insurance is characterized by level premiums, a level death benefit, and a cash value that grows tax-deferred?

A. Term life insurance
B. Universal life insurance
C. Variable universal life insurance
D. Group life insurance

Answer 1

B. Universal life insurance.

C.23 Life insurance (individual and group)

Question 2

What is the purpose of the incontestability clause in a life insurance policy?

A. To prevent the policyholder from changing beneficiaries after the policy has been in force for a certain period of time
B. To provide a grace period for premium payments
C. To ensure that the policy remains in force as long as the premiums are paid
D. To limit the time period during which the insurer can challenge a claim based on misrepresentations made by the policyholder on the application

Answer 2

D. To limit the time period during which the insurer can challenge a claim based on misrepresentations made by the policyholder on the application

C.23 Life insurance (individual and group)

Question 3

Which of the following statements about group life insurance is true?

A. Group life insurance is typically more expensive than individual life insurance.
B. Group life insurance is usually purchased by individuals for themselves.
C. Group life insurance policies are usually term policies.
D. Group life insurance policies are usually underwritten on an individual basis.

Answer 3

C. Group life insurance policies are usually term policies.

C.23 Life insurance (individual and group)

Question 4

Which of the following types of life insurance is characterized by a death benefit that is tied to the performance of underlying investments?

A. Term life insurance
B. Universal life insurance
C. Variable universal life insurance
D. Group life insurance

Answer 4

C. Variable universal life insurance.

C.23 Life insurance (individual and group)

Question 5

Which of the following is an advantage of whole life insurance compared to term life insurance?

A. Whole life insurance provides a higher death benefit.
B. Whole life insurance provides more flexibility in premium payments.
C. Whole life insurance provides a cash value that can be used during the policyholder’s lifetime.
D. Whole life insurance premiums are usually lower than term life insurance premiums.

Answer 5

C. Whole life insurance provides a cash value that can be used during the policyholder’s lifetime

C.23 Life insurance (individual and group)

Question 6

John is considering purchasing life insurance. He is 35 years old and has a wife and two young children. He wants to ensure that his family will be financially secure if he were to die unexpectedly. Which of the following types of life insurance would be the most appropriate for John?

A. Term life insurance
B. Whole life insurance
C. Variable universal life insurance
D. Group life insurance

Answer 6

A. Term life insurance

C.23 Life insurance (individual and group)

Question 7

Sarah is an employer who wants to offer life insurance as a benefit to her employees. Which of the following types of life insurance would be the most appropriate for Sarah to offer?

A. Term life insurance
B. Whole life insurance
C. Variable universal life insurance
D. Group life insurance

Answer 7

D. Group life insurance

C.23 Life insurance (individual and group)

Question 8

Which of the following is an advantage of term life insurance compared to permanent life insurance?

A. Term life insurance provides a cash value.
B. Term life insurance provides a higher death benefit.
C. Term life insurance premiums are usually lower.
D. Term life insurance provides more investment options.

Answer 8

C. Term life insurance premiums are usually lower

C.23 Life insurance (individual and group)

Question 9

Which of the following types of life insurance is characterized by a death benefit that decreases over time?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Variable universal life insurance

Answer 9

A. Term life insurance

C.23 Life insurance (individual and group)

Question 10

Which of the following factors is typically not considered when determining the premium for a life insurance policy?

A. Age
B. Gender
C. Health status
D. Occupation

Answer 10

D. Occupation

C.23 Life insurance (individual and group)

Question 11

Emily is considering purchasing a permanent life insurance policy. She wants to ensure that her policy will provide coverage for her entire lifetime, regardless of any changes to her health. Which of the following types of permanent life insurance would be the most appropriate for Emily?

A. Whole life insurance
B. Universal life insurance
C. Variable universal life insurance
D. Group life insurance

Answer 11

A. Whole life insurance

C.23 Life insurance (individual and group)

Question 12

Which of the following is a disadvantage of whole life insurance compared to term life insurance?

A. Whole life insurance provides less coverage.
B. Whole life insurance premiums are usually higher.
C. Whole life insurance policies are not as flexible.
D. Whole life insurance policies do not provide a cash value.

Answer 12

B. Whole life insurance premiums are usually higher

C.23 Life insurance (individual and group)

Question 13

Which of the following factors may affect an individual’s ability to obtain life insurance coverage?

A. Age
B. Gender
C. Health status
D. All of the above

Answer 13

D. All of the above

C.23 Life insurance (individual and group)

Question 14

Tom is considering purchasing a life insurance policy. He wants to ensure that his policy will provide coverage for his entire lifetime and also provide a cash value that he can use during his lifetime. Which of the following types of life insurance would be the most appropriate for Tom?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 14

B. Whole life insurance

C.23 Life insurance (individual and group)

Question 15

Which of the following types of life insurance is characterized by the policyholder’s ability to choose how the policy’s cash value is invested?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 15

C. Universal life insurance

C.23 Life insurance (individual and group)

Question 16

John is a 35-year-old married father of two young children. He wants to ensure that his family will be financially secure if he were to die unexpectedly. Which of the following types of life insurance would be the most appropriate for John?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 16

A. Term life insurance

C.23 Life insurance (individual and group)

Question 17

Sarah is a 40-year-old business owner who wants to offer life insurance as a benefit to her employees. Which of the following types of life insurance would be the most appropriate for Sarah to offer?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 17

D. Group life insurance

C.23 Life insurance (individual and group)

Question 18

Emily is a 50-year-old widow with grown children who are financially independent. She wants to ensure that her final expenses are covered and that her remaining assets are passed on to her children. Which of the following types of life insurance would be the most appropriate for Emily?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 18

B. Whole life insurance

C.23 Life insurance (individual and group)

Question 19

Tom is a 25-year-old single college student who has no dependents. He wants to ensure that his parents are not burdened with any final expenses if he were to die unexpectedly. Which of the following types of life insurance would be the most appropriate for Tom?

A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 19

A. Term life insurance

C.23 Life insurance (individual and group)

Question 20

Karen is a 60-year-old retiree with no dependents. She wants to ensure that her remaining assets are passed on to her favorite charity. Which of the following types of life insurance would be the most appropriate for Karen?
A. Term life insurance
B. Whole life insurance
C. Universal life insurance
D. Group life insurance

Answer 20

B. Whole life insurance

C.23 Life insurance (individual and group)

Question 21

Julia is a sales director for XYZ Tech Solutions, Ltd. XYZ offers a comprehensive benefits package that includes short-term disability coverage. XYZ has secured a group disability policy to fund this perk, and neither Julia nor any other XYZ employees contribute towards the premiums for the policy. Which of the following statements best describes the income tax implications of this arrangement for XYZ and Julia?

A. XYZ can deduct the premiums from its gross income and Julia will be taxed on benefits that she receives under the policy.
B. XYZ can deduct the premiums from its gross income and Julia will not be taxed on benefits that she receives under the policy.
C. XYZ cannot deduct the premiums from its gross income but can deduct benefits paid to Julia under the policy.
D. XYZ cannot deduct the premiums from its gross income and Julia will be taxed on benefits that she receives under the policy.

Answer 21

A. XYZ can deduct the premiums from its gross income and Julia will be taxed on benefits that she receives under the policy.

C.23 Life insurance (individual and group)