Uses Of Insurance Flashcards

1
Q

All of the following are considered appropriate uses of life insurance for
business purposes EXCEPT

A

Protecting the business by covering entry-level employees with life insurance

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2
Q

Which approach predicts a person’s earning potential and determines
how much of that amount would be devoted to dependents?

A

Human life value approach

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3
Q

Which of these factors is NOT taken into account when determining an
applicant’s life insurance needs?

A

Automobile

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4
Q

Buy-sell agreements are typically funded by which two insurance
products?

A

Life insurance & disability insurance

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5
Q

Key person insurance is intended to

A

Cover business losses due to the death of a key employee

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6
Q

Which of these is a method of determining the level of funds required for
ongoing support in the event of the breadwinner’s death?

A

Human life value

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7
Q

The Human Life Value concept is based on

A

Income

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8
Q

All of the following are examples of a Business Continuation Plan EXCEPT

A

Deferred compensation

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9
Q

Bob and Tom are partners in a business. If one of them were to die, which
Of the following would guarantee a market for each of their share of the
business?

A

Buy-Sell agreement

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10
Q

Which of the following pieces of information is NOT gathered during the
personal financial planning process?

A

And individuals civil organization membership

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11
Q

When calculating the amount of life insurance needed for an income
earner, what has to be determined when using the Needs Approach?

A

The families financial objective if the income earner were to die or become disabled

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12
Q

All of these are common personal uses of life insurance EXCEPT

A

Find a Buy-sell agreement

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13
Q

Craig purchased a life insurance policy for enabling his heirs to pay estate
taxes. What is this called?

A

Estate conservation

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14
Q

Life insurance creates an immediate estate. This phrase means

A

When the insured dies, a death benefit is paid

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