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Lesson 10 Quiz

The following quiz is provided for your information to help you measure your retention level on the material covered within this lesson. It is not graded. Only the final examination is graded.

Answer or complete each question to the best of your knowledge and click on the "Check your answer" button. If your answer is incorrect, you will be instructed where to find the correct answer. It is not necessary to repeat the quiz if you exit this page; however, your answers will not be saved once you exit. This feature is provided for future practice purposes.

1
Determining Needs

To fully appreciate the purpose of life insurance, understand that its roots lie in economics and the concept of:

a)
b)
c)
d)
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2

The two basic approaches in determining how much insurance coverage is needed are:

a)
b)
c)
d)
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3

The Human Life Value Approach is more practical than the Needs Approach.

a)
b)
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4
Individual Uses of Life Insurance

The __________________ is the time period when the children are growing in age and expenses for them rise, which typically lasts until the youngest child of the family reaches age 18.

a)
b)
c)
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5

The __________________ is the timeframe when the youngest eligible child reaches the age of 16 and the surviving spouse has not yet reached the age of 60, Social Security benefits for the surviving spouse are temporarily suspended.

a)
b)
c)
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6
Business Uses of Life Insurance

There are several ways life insurance is used in business. Which of the following does NOT apply?

a)
b)
c)
d)
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7

are usually operated as sole proprietorships, which have only one owner. have two or more owners who contribute to the business and share the profits. can be publicly held or closely held.


Word bank: Corporations, Partnerships, Small businesses

Small businesses are usually operated as sole proprietorships, which have only one owner. Partnerships have two or more owners who contribute to the business and share the profits. Corporations can be publicly held or closely held.

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8

Who can draft Buy-Sell agreements?

a)
b)
c)
d)
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9

In a Close Corporation Cross-Purchase plan involving three owners, how many life insurance policies in total are purchased?

a)
b)
c)
d)
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10

In a Partnership Entity Buy-Sell plan involving three partners, how many life insurance policies in total are purchased?

a)
b)
c)
d)
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11

In a Buy-Sell agreement involving a close corporation, the parties to the agreement are the:

a)
b)
c)
d)
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12

Key Person insurance gives complete control of the policy to the _______________ as an owned asset.

a)
b)
c)
d)
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13
Employee Benefit Plans

In a Salary Continuation plan, premiums paid by the employer:

a)
b)
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14

A Salary Continuation plan is set up between the employer and employees and is funded by the:

a)
b)
c)
d)
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15

Deferred Compensation plans are nonqualified plans that are comprised of a contractual agreement to pay benefits in the future.

a)
b)
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Helpful Hint