PFS Risk Management & Insurance Planning

Question 1

What type of life insurance provides a death benefit for a specified period with no cash value accumulation?

Accepted Answer

Term life insurance

Answer

Whole life insurance

Answer

Universal life insurance

Answer

Variable life insurance

Question 2

The 'human life value' approach to determining life insurance needs is based on:

Accepted Answer

The present value of the insured's future earnings

Answer

The insured's current net worth

Answer

The insured's outstanding debts only

Answer

Replacement cost of household services

Question 3

A disability income policy with an 'own-occupation' definition pays benefits when the insured:

Accepted Answer

Cannot perform the material duties of their specific occupation

Answer

Cannot work in any occupation whatsoever

Answer

Is hospitalized for more than 30 consecutive days

Answer

Suffers any chronic illness

Question 4

The elimination period in a disability income policy functions most like which feature in property insurance?

Accepted Answer

Deductible

Answer

Coverage limit

Answer

Coinsurance clause

Answer

Subrogation right

Question 5

Which type of life insurance allows the policyholder to adjust both the premium payments and the death benefit amount?

Accepted Answer

Universal life

Answer

Term life

Answer

Whole life

Answer

Endowment policy

Question 6

In a 'key person' life insurance arrangement, who is the owner and beneficiary of the policy?

Accepted Answer

The business entity itself

Answer

The key employee and their estate

Answer

The key employee's spouse

Answer

A trust established by shareholders