CMFAS Life Insurance M5

Question 1

What is the primary purpose of life insurance?

Accepted Answer

To provide financial protection to dependents upon the insured's death

Answer

To generate investment returns

Answer

To avoid paying taxes

Answer

To save for retirement

Question 2

What is a term life insurance policy?

Accepted Answer

A policy that provides coverage for a specific period only

Answer

A permanent insurance policy

Answer

A policy that covers all types of risks

Answer

A savings plan

Question 3

What is a whole life insurance policy?

Accepted Answer

A policy that provides lifelong coverage and may accumulate cash value

Answer

A policy that expires at age 65

Answer

A short-term policy

Answer

A policy that only covers accidents

Question 4

What is the difference between the policyholder and the insured?

Accepted Answer

The policyholder owns the policy; the insured is the person whose life is covered

Answer

They are always the same person

Answer

The insured pays the premiums

Answer

There is no difference

Question 5

What is a premium in life insurance?

Accepted Answer

The amount paid periodically to keep the insurance policy in force

Answer

The benefit paid upon death

Answer

The surrender value of a policy

Answer

A bonus payment

Question 6

What is a beneficiary in a life insurance policy?

Accepted Answer

The person designated to receive the death benefit

Answer

The insurance company

Answer

The insurance agent

Answer

The policyholder