Question

Life Insurance Questions:

1. Vlad recommends an accident and sickness policy to his client Manjit. However, Manjit is concerned that the premiums are just outside of what she feels she can afford. When Manjit asks Vlad to recommend an option to make the premiums more affordable, which of the following would lower the premiums?

1. Add riders to the policy
2. Reduce the amount of the benefit
3. Reduce the waiting period
4. Extend the benefit period

2. Kaitlyn earns $60,000 annually and has a disability insurance (DI) policy with a residual disability clause. The policy pays $3,500 per month, has a 0-day waiting period, and a 5-year benefit period. Kaitlyn becomes injured and qualifies for disability payments under the terms of her policy. 12 months later, she returns to work on a part-time basis, earning 25% of her pre-disability income. Kaitlyn continues working part-time for 24 months and then returns to work on a full-time basis. How much will Kaitlyn receive in total-part-time income and benefits for the whole period that she was disabled?

1. 105,000
2. 126,000
3. 135,000
4. 156,000

3. Vienna is interested in purchasing a critical illness insurance policy, but is unsure about the amount of coverage she should purchase. Vienna has a family history of cancer and is most concerned with the costs she may incur if she is diagnosed. She meets with Mitchell, an insurance agent, and he shows her several different CI policies, each with some variation on the covered conditions. Which of the following is a factor that should be considered in determining the amount of coverage that Vienna should apply for given her concerns?

1. Estimate of expenses needed
2. Benefits as a percentage of income
3. The conditions covered within the policy
4. Family health history

Answer 1

1. Correct Option : B

All the options except B will increase the premiums.

Only reducing the amount of benefits will lowers the premium.

2. Total Part time Income :

= 2 Years * 25% of pre-disability income

= 2 * 0.25 * 60000

= $30000.

Benefits for the disability period :

Total Disability Period = 36 Months

Benefits under policy = $3500 / month

Total benefits = 3500 * 36

= $126000.

Therefore, Total income :

= $30000 + $126000

= $156000.

Therefore, correct option is D.

3. Vienna is unsure about the anount of the coverage she would need.

She is also concerned about costs she would incur if she is diagnosed with cancer.

Therefore, to determine amount of coverage, she should consider Estimate of expense needed.

Therefore, correct option is A.