LOMA 281 Module 2 Practice Questions and Answers | 100% Pass

LOMA 281 Module 2 Practice Questions and Answers | 100% Pass Which type of whole life insurance policy will best be able to give Arabella lifetime protection without straining her retirement income? Single-premium whole life policy Limited-payment whole life policy Continuous-premium whole life policy - Answer️️ -B Financial needs life insurance can meet - Answer️️ -- paying household expenses - covering outstanding debts - Paying outstanding medical, hospital, and funeral expenses, - providing financial support for the family - funding a child's education Term Life Insurance - Answer️️ -Life insurance that provides a death benefit only if the insured dies during the period specified in the policy. level term life insurance - Answer️️ -Term life insurance that provides a policy benefit that remains the same over the term of the policy. Decreasing Term Life Insurance - Answer️️ -Term life insurance that provides a policy benefit that decreases in amount over the term of coverage ©SOPHIABENNETT EXAM SOLUTIONS Saturday, September 7, 2024 6:58 PM Page | 2 Mortgage Insurance - Answer️️ -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? a. yes b. no - Answer️️ -B. Who can Michael name as the beneficiary of his mortgage insurance policy? a. His Wife Only b. Archway Bank Only c. His Wife, Archway Bank, or Someone Else - Answer️️ -C. If Michael names his wife as the policy beneficiary, does she have to use the policy proceeds to repay the mortgage loan? a. yes b. no - Answer️️ -B. Credit Life Insurance - Answer️️ -A type of term life insurance designed to pay the balance due on a loan if the borrower dies before the loan is repaid. ©SOPHIABENNETT EXAM SOLUTIONS Saturday, September 7, 2024 6:58 PM Page | 3 Family Income Coverage - Answer️️ -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 - Answer️️ -Term life insurance that provides a death benefit that starts at one amount and increases by some specified amount or percentage at stated intervals over the policy term. Decide whether the statements below describe 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 benefit for the fifth year is $10,000. a. Increasing Term Insurance b. Level Term Insurance c. Decreasing Term Insurance - Answer️️ -C. A 5-year term life insurance policy that provides a $100,000 death benefit if the insured dies at any time during the 5-year policy term. a. increasing term insurance b. level term insurance c. decreasing term insurance - Answer️️ -B. ©SOPHIABENNETT EXAM SOLUTIONS Saturday, September 7, 2024 6:58 PM Page | 4 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. Increasing term insurance Level term insurance Decreasing term insurance a. increasing term insurance b. level term insurance c. decreasing term insurance - Answer️️ -A. Return of Premium (ROP) - Answer️️ -A form of term life insurance that provides a death benefit if the insured dies during the term of coverage and promises a return of premiums if the insured does not die during the term of coverage. Renewable Term Insurance - Answer️️ -Term life insurance that gives the policyowner the option to continue the policy's coverage at the end of the specified term without presenting evidence of insurability. Evidence of insurability - Answer️️ -Proof that a given person is an insurable risk. Suppose Carter buys a renewable term insurance policy. Do you think he can renew the policy as many times as he wants? a. Yes b. No c. Can't tell. Need more information. - Answer️️ -B. ©SOPHIABENNETT EXAM SOLUTIONS Saturday, September 7, 2024 6:58 PM Page | 5 Suppose Blythe renews her $100,000 20-year renewable policy at the end of the policy term. Do you think the amount of coverage is automatically cut in half to $50,000? a. Yes b. No c. Can't tell. Need more information. - Answer️️ -B. Attained Age - Answer️️ -The age an insured has reached (attained) on a specified date. Convertible Term Insurance - Answer️️ -Term life insurance that gives the policyowner the right to convert the term policy to a cash value life insurance policy without providing evidence of insurability. Conversion Period - Answer️️ -The specified period of time following policy issu