CFC Insurance and Risk Management

Question 1

Which type of life insurance provides permanent coverage and builds cash value through a separate investment account?

Accepted Answer

Variable universal life (VUL) insurance

Answer

Term life insurance

Answer

Whole life insurance

Answer

Group term insurance

Question 2

A disability income policy with an 'own-occupation' definition covers a claimant who:

Accepted Answer

Cannot perform the specific duties of their own occupation

Answer

Cannot perform any job in the economy

Answer

Is partially disabled only

Answer

Has a pre-existing condition only

Question 3

Which long-term care insurance (LTCI) benefit trigger requires that a claimant be unable to perform a specified number of Activities of Daily Living (ADLs)?

Accepted Answer

2 out of 6 ADLs

Answer

1 out of 3 ADLs

Answer

5 out of 6 ADLs

Answer

All 6 ADLs

Question 4

An 'umbrella' liability insurance policy primarily provides:

Accepted Answer

Excess liability coverage above underlying home and auto policy limits

Answer

Replacement cost coverage for personal property

Answer

Life insurance for catastrophic events

Answer

Health coverage for international travel

Question 5

Which annuity type guarantees a fixed income payment for life regardless of how long the annuitant lives?

Accepted Answer

Life-only (straight life) annuity

Answer

Fixed deferred annuity

Answer

Variable annuity

Answer

Indexed annuity

Question 6

The human life value approach to life insurance need analysis estimates coverage based on:

Accepted Answer

The present value of the insured's future earnings stream

Answer

Final expenses and outstanding debts only

Answer

Current income times a fixed multiplier of 10

Answer

The cost of replacing household services