Fin 301 Test 2 True/False – Flashcards
Unlock all answers in this set
Unlock answersquestion
In the long run stocks typically have a higher rate of return than that of bonds
answer
True
question
You may reinstate your lapsed life insurance policy without answering health related questions again
answer
False
question
The cash value of a whole life insurance policy can be used as a source of loan collateral
answer
True
question
Avoiding alcoholic beverages while driving is an example of risk reduction
answer
True
question
Stafford loans may be subsidized or unsubsidized
answer
True
question
The basic purpose of insurance is to protect you from the results of accidental losses.
answer
True
question
All types of life insurance offer a cash surrender value
answer
False
question
One should typically name both primary and contingent beneficiaries for life insurance policies
answer
True
question
When you stop making premium payments on a whole life policy, the protection is immediately forfeited
answer
False
question
If a loan has a prepayment penalty, there will be an additional cost to repay the loan early
answer
True
question
Borrowing to pay for a college education is a legitimate use of credit
answer
True
question
Life insurance death benefits are not subject to income Tax
answer
True
question
Investing is considered a short term activity that involves the buying and selling of securities
answer
False
question
Whole life policies typically provide a high investment rate of return
answer
False
question
Commercial banks are generally more selective in granting loans than finance companies.
answer
True
question
Spreading risk among large number of people is a major principle of life insurance
answer
True
question
A no load, low expense mutual fund is not a smart choice for investing
answer
False
question
Term Insurance is generally the most economical form of life insurance for young families
answer
True
question
The needs approach to evaluate the right amount of life insurance is the most accurate method to determine the proper amount of death benefits.
answer
True
