Question 1

The degree of risk associated with the timing of a person's death is zero because everyone is certain to die.

Accepted Answer

The degree of risk associated with the timing of a person's death is not zero because, although death is certain, the timing of death is uncertain and varies greatly among individuals.

Question 2

An executor is the person appointed to carry out the terms of a person's will.

Accepted Answer

An executor is indeed the person appointed by a will to execute, or carry out, the terms and instructions laid out in that will upon the testator's death.

Question 3

A key employee is defined as an officer, a director, or a chief executive officer of a corporate business.

Accepted Answer

A key employee is not limited to those titles; it generally refers to an individual considered crucial to the business due to their expertise, skills, or contributions, which can extend beyond officers, directors, or CEOs.

Question 4

A premature death is one that occurs before a person is ready to die.

Accepted Answer

A premature death is one that occurs before the average age of death for a population, not necessarily related to an individual's readiness to die.

Question 5

Mortality tables based on insured lives tend to project longer lives than those based on the general population.

Accepted Answer

Mortality tables based on insured lives often show longer life expectancies because individuals who buy insurance tend to be healthier and have higher socioeconomic status than the general population, leading to lower mortality rates.

Question 6

Females tend to outlive males.

Accepted Answer

Statistically, females have a longer life expectancy than males in most countries, due to a combination of biological, behavioral, and social factors.

Question 7

Human life value is the best measure of the needs that will result from a particular person's premature death.

Accepted Answer

Human life value is one approach to estimate the economic loss or needs that might result from a person's premature death, but it is not universally the best measure as it primarily focuses on lost future income and may not fully account for all needs or values, such as emotional loss, that result from a person's death. Other methods and considerations might be more appropriate depending on the specific circumstances and what needs are being assessed.

Question 8

Approximately 41 percent of personal health care expenditures in the United States are attributable to hospital costs.

Accepted Answer

Hospital costs represent a significant portion of personal health care expenditures in the United States, with estimates often indicating that around 40% or more of these expenditures can be attributed to hospital care, making the statement plausible.

Question 9

Both the frequency and severity of losses associated with hospitalization vary considerably by geographic location.

Accepted Answer

The frequency and severity of losses associated with hospitalization can vary significantly by geographic location due to differences in healthcare systems, availability of medical services, prevalence of diseases, environmental factors, and socioeconomic conditions.

Question 10

Despite the fact that there has been tremendous growth in the percentage of people over age 65, the percentage of people over age 85 has tended to decrease slightly in recent years.

Accepted Answer

The percentage of people over age 85 has actually been increasing, not decreasing, in recent years due to improvements in healthcare and longevity.

Question 11

The extent to which a person is disabled is sometimes highly subjective.

Accepted Answer

The perception and impact of disability can vary greatly among individuals, influenced by personal, cultural, and contextual factors, making it a subjective experience.

Question 12

At all ages, females have a higher tendency to become disabled than males and males have a higher probability of dying at each age.

Accepted Answer

Statistically, women have a higher incidence of disability across various age groups compared to men, primarily due to longer life expectancies and the types of chronic conditions that affect them. Conversely, men have a higher mortality rate at most ages, which is influenced by a combination of biological, behavioral, and lifestyle factors.

Question 13

The average married couple loses more than half of their combined income on retirement.

Accepted Answer

On average, most couples do not lose more than half of their combined income upon retirement. Many retirees can maintain a significant portion of their pre-retirement income through savings, pensions, Social Security benefits, and other retirement income sources. The actual impact on income varies widely depending on individual circumstances, savings, and planning.

Question 14

An executor fund is typically made up of funds to pay expenses such as funeral and burial costs, estate administration expenses, and bequests made in the decedent's will.

Accepted Answer

An executor fund specifically refers to funds set aside for the purpose of covering the estate's administration expenses, not for paying bequests made in the decedent's will. Funeral and burial costs may be covered, but bequests are typically paid from the estate's assets after expenses and debts are settled.

Question 15

Because a corporation will continue after the death of a major shareholder, there is little need for planning or concern from stockholders in relation to the death of other stockholders.

Accepted Answer

The death of a major shareholder can significantly impact a corporation, especially in closely held companies, as it may affect control, decision-making, and the market value of shares. Planning is important to ensure smooth transitions and to address potential disputes or changes in ownership structure.

Question 16

Match the descriptions with their terms:
-_________________ includes ongoing medical services, with residents seen regularly by doctors.

Accepted Answer

Skilled nursing home care includes ongoing medical services, where residents are regularly seen by doctors. This level of care is for individuals who require constant medical attention.

Question 17

Match the descriptions with their terms:
-The term _________________ refers to the present value of all of the income less taxes and personal maintenance expenses that a person is expected to earn throughout life.

Accepted Answer

The human life value concept estimates the present value of future earnings and is used in calculating life insurance needs.

Question 18

Match the descriptions with their terms:
-_________________ express the probability of living and dying at various ages in a convenient format for a particular assumed population of persons.

Accepted Answer

Mortality tables express the probability of living and dying at various ages in a convenient format for a particular assumed population of persons.

Question 19

Match the descriptions with their terms:
-A/An _________________ occurs before the life stage where death becomes increasingly accepted by society as part of the natural, expected order of life.

Accepted Answer

Premature death is defined as a death that occurs before the life stage where death becomes increasingly accepted by society as part of the natural, expected order of life.

Question 20

Match the descriptions with their terms:
-The person charged with carrying out the terms of a deceased person's will is the _________________.

Accepted Answer

The executor is the individual appointed in a will to manage the deceased's estate, ensuring that all debts are paid and the remaining assets are distributed according to the will's instructions.

Quiz 4: Life, Health, and Loss of Income Exposures