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

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

Females tend to outlive males.

Question 7

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

Question 8

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

Question 9

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

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.

Question 11

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

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.

Question 13

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

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.

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.

Question 16

Match the descriptions with their terms:

-_________________ includes ongoing medical services, with residents seen regularly by doctors.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

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.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

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.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

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.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 20

Match the descriptions with their terms:

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

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 21

Match the descriptions with their terms:

-A/An _________________ results when a person is unable to work because of an illness or an injury.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 22

Match the descriptions with their terms:

-_________________ do not provide medical services; instead, they concentrate on providing personal care services such as assistance with bathing, dressing, eating, and other daily activities.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 23

Match the descriptions with their terms:

-A person who performs services that would be difficult for a business to replace is a/an _________________.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 24

Match the descriptions with their terms:

-A/An _________________ will prevent a person from obtaining any gainful employment during the time of the disability.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 25

Match the descriptions with their terms:

-The _________________ is designed to pay for the expenses associated with the funeral and burial of the decedent, estate and inheritance taxes, estate distribution and administration costs, and the outstanding debts of the decedent.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 26

Match the descriptions with their terms:

-A/An _________________ occurs when a person's condition is expected to leave him or her disabled until death.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 27

Match the descriptions with their terms:

-_________________ are used to gauge the likely severity of disability for personal risk management purposes.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 28

Match the descriptions with their terms:

-A/An _________________ results in a decreased ability to earn a living, but not a complete cessation of employment.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 29

Match the descriptions with their terms:

-A/An _________________ occurs when a person is unable to work for a period of time due to an illness or injury, but eventually returns to his or her job.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 30

Match the descriptions with their terms:

-_________________ involves some level of medical services, but less than that provided by a skilled nursing home.

A) Continuance tables
B) Custodial nursing homes
C) disability loss
D) executor
E) executor fund
F) human life value
G) Intermediate nursing home care
H) key employee
I) Mortality tables
J) partial disability
K) permanent disability
L) premature death
M) Skilled nursing home care
N) temporary disability
O) total disability

Question 31

The expense that represents the lowest percentage of personal health care expenses in the United States is

A) hospitalization
B) dental care
C) physicians' and surgeons' services
D) eye care.

Question 32

The type of nursing home that focuses more on medical care is the

A) skilled nursing home
B) custodial nursing home
C) personal care home
D) intermediate nursing home.

Question 33

The primary loss that results from disability is typically the

A) hospitalization charges,
B) physicians' and surgeons' fees
C) loss of the income that would have been earned
D) costs of long-term care.

Question 34

Which of the following statements is not true in relation to the 1980 CSO Table?

A) The 1980 CSO Table attempts to express the probabilities of living and dying at various ages
B) The 1980 CSO Table stands for the Commissioners Standard Ordinary Mortality Table
C) The 1980 CSO Table is based on the general population of the United States
D) The 1980 CSO Table was constructed by insurance actuaries.

Question 35

According to the 1980 CSO Table, the group that has the lowest death rate is

A) 5-year-old males,
B) 5-year-old females,
C) 20-year-old males,
D) 30-year-old females.

Question 36

The concept of human life value is most correctly used

A) in conjunction with wrongful death claims as a basis for computing a liability award,
B) as a gauge to help determine how much life insurance a person should obtain,
C) as a way to establish the value of an employee to the employer in order to facilitate the purchase of the correct amount of key employee life insurance,
D) as a way to evaluate individual circumstances, resources, or needs.

Question 37

As a percentage of disposable personal income in the United States, health care represents

A) less than 2 percent,
B) about 25 percent,
C) about 41 percent,
D) about 12 percent.

Question 38

Personal care homes most closely resemble

A) skilled nursing homes,
B) custodial nursing homes,
C) adult day care centers,
D) intermediate nursing homes.

Question 39

Which of the following is not a factor that has contributed to the growth of the need for long-term care?

A) Advances in medical science have extended life expectancy,
B) The increasing number of elderly Americans has allowed nursing homes to take advantage of economies of scale, which has made the services more affordable,
C) The number of childless couples has increased,
D) The number of persons over 85 years old has increased.

Question 40

Which of the following statements is true in relation to disability losses?

A) Disability losses can be highly subjective,
B) Disability occurs only when a person is completely incapable of returning to work,
C) Most disabilities are permanent,
D) Males are more likely to become disabled due to sickness than are women.

Question 41

Continuance tables are used to

A) determine the probabilities of living and dying among employees,
B) identify major causes of continuing disabilities,
C) coordinate types of health related insurance,
D) determine the likely severity of disability.

Question 42

The percentage of pre-retirement income needed for a retired couple to maintain the same standard of living is

A) 100 percent,
B) about 120 percent,
C) between 66 and 82 percent,
D) less than 50 percent.

Question 43

Which of the following most accurately and completely describes the factors that typically complicate retirement income planning?

A) uncertainty as to the future increases in the cost of living, uncertainty as to which spouse will die first, and uncertainty as to how long a person will live,
B) uncertainty as to the future increases in the cost of living, uncertainty as to which spouse will die first, uncertainty as to how long a person will live, and the coordination of benefits from various sources, such as Social Security, employee retirement plans, part-time earnings, investment income, etc.,
C) uncertainty as to the future increases in the cost of living, uncertainty as to which spouse will die first, and the coordination of benefits from various sources, such as Social Security, employee retirement plans, part-time earnings, investment income, etc.,
D) uncertainty as to how long a person will live and the coordination of benefits from various sources, such as Social Security, employee retirement plans, part-time earnings, investment income, etc.

Question 44

Which of the following factors often complicates evaluation of personal income needs resulting from a loss due to premature death?

A) If a person is a key employee in a non-family owned corporation, his or her family may face significant personal expenses,
B) Married people's level of financial dependence on each other varies with the passage of time,
C) The human life value decreases as the length until retirement decreases,
D) Life expectancies in the United States are continually changing.

Question 45

Expenses that would typically not be paid from an executor fund are

A) specific bequests made in a will,
B) funeral and burial expenses,
C) currently payable debts of the decedent,
D) expenses of estate administration.