Test Your Life Insurance IQ
Buying life insurance is one of the most important steps you can take to protect your family's financial future in the event of your death. But how much do you actually know about life insurance?
What is term life insurance?
A form of life insurance that requires you to meet a set of conditions, such as wearing a heart monitor.
Life insurance that expires after a set amount of time.
Life insurance that you can only get through your job.
A policy that requires periodic health checks to remain in effect.
What is permanent life insurance?
Life insurance that can last for life, as long as you stay current on your payments.
A form of coverage that you can only get when you are young.
Life insurance you are contractually obligated to keep for life.
A policy that covers multiple generations of your family.
Which of these is a key difference between term and permanent life insurance?
Term life insurance initially has a lower premium than permanent life insurance for the same amount of coverage.
Permanent life insurance builds a cash value that you can borrow against.
Rates for term life insurance generally increase as you age, while permanent life insurance rates remain steady.
All of these are correct.
Do you need a medical
to get life insurance?
No. Life insurance companies used to require this, but that was before the Internet.
Yes. A life insurance company must have a medical professional determine if you are healthy before insuring you.
Yes, but the exam is less extensive than it used to be.
It depends. Some life insurance companies and products still require a medical exam, and some base acceptance on health questions and information.
Which of these are important reasons
to buy life insurance? (Choose all that apply):
Cover funeral costs, medical bills and other end-of-life expenses
Help your spouse cover everyday expenses, such as rent or mortgage costs and utilities.
Help pay off debt left behind after your death
Leave a gift for your children or grandchildren
Supplement existing coverage
5 out of 5 correct!
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