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Indestata > News > Test your life insurance knowledge ~ A Credit Sesame Quick Quiz
News

Test your life insurance knowledge ~ A Credit Sesame Quick Quiz

TSP Staff By TSP Staff Last updated: August 8, 2024 5 Min Read
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Take Credit Sesame’s quick quiz to test your life insurance knowledge if you are considering taking out insurance.

Life insurance is a contract between you and an insurance company designed to provide financial protection for your beneficiaries in the event of your death. Policies come in various types with different features and costs. How good is your life insurance knowledge?

1. What is the primary purpose of life insurance?

A. Save money for retirement
B. Cover medical expenses
C. Provide financial protection for loved ones
D. Invest in the stock market

2. What is a beneficiary in a life insurance policy?

A. The person who pays the premiums
B. The insurance company
C. The person who receives the death benefit
D. The policyholder’s financial advisor

3. What is a term life insurance policy?

A. A policy that covers you for your entire life
B. A policy that covers you for a specific period
C. A policy that combines life insurance and investments
D. A policy with a guaranteed cash value

4. What is a whole life insurance policy?

A. A policy that covers you for a specific period
B. A policy that covers you for your entire life
C. A policy that only covers accidental death
D. A policy that covers critical illnesses

5. What is a rider in a life insurance policy?

A. An additional coverage option
B. The policyholder’s address
C. The amount of the death benefit
D. The premium payment schedule

6. What is the death benefit in a life insurance policy?

A. The amount paid to the policyholder while alive
B. The amount paid to the beneficiary upon the policyholder’s death
C. The cost of the life insurance policy
D. The policyholder’s age

7. What is a cash-value life insurance policy?

A. A policy that builds up a savings component
B. A policy that only covers accidental death
C. A policy with no cash value
D. A policy that covers a specific period

8. What are the primary factors affecting the cost of life insurance?

A. Age, health, and smoking habits
B. Marital status and number of children
C. Education level and income
D. Homeownership status and location

9. What is the purpose of a life insurance needs analysis?

A. Determining the right amount of coverage
B. Choosing the best insurance company
C. Selecting the appropriate policy type
D. All of the above

10. How might your credit score affect your life insurance?

A. Credit score has no impact on life insurance
B. A poor credit score can lead to higher premiums
C. A good credit score guarantees lower premiums
D. Only certain types of life insurance consider credit scores

Test your life insurance knowledge quiz ANSWERS

  1. C–The primary purpose of life insurance is to provide financial protection for loved ones.
  2. C–The beneficiary is the person who receives the death benefit.
  3. B–A term life insurance policy covers you for a specific period.
  4. B–A whole life insurance policy covers you for your entire life.
  5. A–A rider is an additional coverage option.
  6. B–The death benefit is the amount paid to the beneficiary upon the policyholder’s death.
  7. A–A cash-value life insurance policy builds up a savings component.
  8. A–Age, health, and smoking habits are well-established factors affecting insurance rates. Other factors may influence rates to a lesser extent.
  9. D–A life insurance needs analysis helps determine the right amount of coverage, insurance company, and policy type.
  10. B–A poor credit score can lead to higher premiums for some life insurance policies.

If you enjoyed Test your life insurance knowledge you may like,


Disclaimer: The article and information provided here are for informational purposes only and are not intended as a substitute for professional advice.

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