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Planning Intermediate: Choosing Life Insurance

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1.
The financial soundness of a life insurance company matters to you because it affects the companys ability to pay your claims.
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True. Indeed, this is what insurance companies are in business for, and the healthier they are, the better they can pay claims.
2.
If you are young and dont have much money to spend on life insurance, which is going to be more affordable for you?
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Term life insurance. Term is quite affordable for the young, though it rises in price as you age.
3.
Proceeds from a life insurance policy could be used to pay for your own funeral.
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True. This is one of the common uses for life insurance; a policyholders surviving dependents use the proceeds for the policyholders funeral costs.
4.
All other factors being equal, which of the following forms of term life insurance is less expensive?
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Group term. Group is cheaper because the cost and the risk are spread among many people.
5.
Life insurance is one field where having a license to practice is optional.
Choose wisely. There is only one correct answer.
False. Agents are required by law to be licensed in any state they practice in.