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Financial Literacy Flashcards | StudBud
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Financial Literacy
Financial Literacy
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Flashcards
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Questions
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Answers
1
What is the main reason people purchase term life insurance?
To invest in the stock market
Covers for a period of time at a lower cost
To build money
2
Which of the following is a disadvantage of whole life insurance?
Higher premiums
No cash value
Covers for a set period
3
What is a beneficiary?
Another name for a neighbor
A court judge
Person who collects the money when you die
4
What is a common use of the cash value in a whole life insurance policy?
To take out loans or accumulate savings
To pay for premiums
To fund medical expenses
5
Which type of life insurance provides lifelong coverage?
Health Insurance
Whole life insurance
Term life insurance
6
How does whole life insurance differ from term life insurance?
Whole life insurance is less expensive
Whole life has lower premiums
Whole insurance builds cash value over time, term does not
7
Whole life insurance provides a payout if the person dies at any point during the policy period
False
True
8
Which of the following is a key feature of term life insurance?
Covers a fixed period, such as 10 or 20 years
Builds cash value over time
Covers the policyholder’s entire life
9
Which of the following is a feature of whole life insurance policies?
Limited coverage period
No cash value
Fixed death benefit
10
Which is a benefit of whole life insurance?
No medical exam required
Lower premiums
Lifelong coverage
11
How are premiums structured for whole life insurance?
Increases with age
Person’s health
Fixed for the life of the policyholder
12
Whole life insurance policies have lower premiums than term life insurance policies.
True
False
13
Term insurance is suggested for those who need short coverage.
True
False
14
Whole life insurance has lifelong coverage, builds cash value.
True
False
15
Term life insurance is more expensive than whole life insurance for the same coverage amount.
False
True
16
Which factor makes whole life more expensive than term life?
Whole life includes an investment and lifetime coverage
It does not require health assessments
It has a higher death benefit
17
What is life insurance?
Covers your pets bills for life
Helps pay doctor bills
Covers expenses when you die
18
What does the "premium" refer to in life insurance?
The cash value builds over time
The amount paid to the insurance company monthly
The death benefit paid to beneficiaries
19
Which of the following is a benefit of term life insurance?
Covers the policyholder’s entire life
Lower premiums
Builds cash value
20
What is an advantage of term life insurance?
It provides a return on investment
It provides coverage for the policyholder’s entire life
It is more affordable than whole life insurance
