Uses Of Life

Question 1

All of the following are examples of a Business Contribution Plan EXCEPT
A) key person insurance
B) cross-purchase agreement
C) stock redemption plan
D) deferred compensation

Answer 1

D) deferred compensation

Question 2

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

Answer 2

Human life value approach

Question 3

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) financial loss value
B) human life value
C) assessment value
D) replacement value

Answer 3

B) human life value

Question 4

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

Answer 4

The family’s financial objectives of the income earner were to die or become disabled

Question 5

Which of these factors is NOT taken into account when determining an applicant’s life insurance needs?
A) Social Security
B) automobile
C) savings
D) pension

Answer 5

B) automobile