LOMA 281 Module 2 Lesson 1 - Term Life Insurance EXAM 100% Correct!!
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Course
LOMA 281
Institution
LOMA 281
Assume that Caryer has life insurance on his own life. Select the box beside each financial need that you think life insurance can meet
Paying household expenses (utility bills, food, clothing, etc)
Covering outstanding debts (mortgage and car loans, etc)
Paying future outstanding medical, hos...
Covering outstanding debts (mortgage and car loans, etc)
Paying future outstanding medical, hospital, and funeral expenses
Providing financial support for the family
Funding a child's education - ANSWER All the above
Term Life Insurance - ANSWER Life Insurance that provides a death benefit only if the insured dies
during the period specified in the policy
True or False:
Few policy terms are shorter than one year - ANSWER True
Level Term Insurance - ANSWER Term life insurance that provides a policy benefit that remains the
same over the term of the policy. Simplest form of term life insurance
Decreasing Term Life Insurance - ANSWER Term life insurance that provides a policy benefit that
decreases in amount over the term of coverage
Mortgage Insurance - ANSWER A plan of decreasing term insurance designed to provide a benefit
amount that corresponds to the decreasing amount owed on a mortgage loan
When Michael bought a house, he obtained a mortgage loan from the Archway Bank. He also bought
a mortgage insurance policy from Able Life. Is Archway Bank a party to Michael's mortgage insurance
contract with Able Life? - ANSWER No - the mortgage loan and the insurance contract are two
separate transactions
, When Michael bought a house, he obtained a mortgage loan from the Archway Bank. He also bought
a mortgage insurance policy from Able Life. Who can Michael name as the beneficiary of his
mortgage insurance policy? - ANSWER His wife, Archway Bank, or someone else
When Michael bought a house, he obtained a mortgage loan from the Archway Bank. He also bought
a mortgage insurance policy from Able Life. If Michael names his wife as the policy beneficiary, does
she have to use the policy proceeds to repay the mortgage loans? - ANSWER No - She can use the
proceeds to repay the mortgage loan, but she isn't required to
Credit Life Insurance - ANSWER A type of term life insurance designed to pay the balance due on a
loan if the borrower dies before the loan is required
Family Income Coverage - ANSWER A plan of decreasing term life insurance that provides a stated
monthly income benefit amount if the insured dies during the term of coverage
Increasing Term Life Insurance - ANSWER Term life insurance that provides a death benefit that starts
at one amount by some specified amount or percentage at stated intervals over the policy term
Increasing Term Insurance, Level Term Insurance, or Decreasing Term Insurance:
A 5 year term life insurance policy that offers a death benefit of $50,000 for the first year of the
policy term, $40,000 for the second year, and so on. The benefits for the fifth year is $10,000 -
ANSWER Decreasing Term Insurance
Increasing Term Insurance, Level Term Insurance, or Decreasing Term Insurance:
A 5 year term life insurance policy that provides a $100,000 death benefit if the insured dies at
anytime during the 5-year policy term - ANSWER Level Term Insurance
Increasing Term Insurance, Level Term Insurance, or Decreasing Term Insurance:
A 5 year term life insurance policy that pays a $100,000 benefit during the policy's first year, a
%105,000 benefit during the second year, and so on. The benefit during the fifth year is $120,000. -
ANSWER Increasing Term Insurance
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