5. When Kathy buys a single premium whole life policy:

1. she makes the same premium payment each year of the policy period.
2. she pays the entire premium in a lump sum when the policy is issued and is then covered for her whole life
3. she makes the same premium payment each year for a limited number of years and is then covered for her whole life.
4. she makes the same premium payment each year for her whole life and is covered for her whole life.

6. Which of the following will increase the implicit return on life insurance savings?

1. lower lapse rates for the insurer
2. policyholder drops the policy early
3. insurer has high expense loading
4. none of the above

7. Which of the following is not a tax benefit of cash value life insurance?

1. death benefits are not taxable income
2. life insurance premiums paid are tax deductible.
3. the annual increase in the cash value while the policy is in force is not taxed.
4. returns earned on the savings component are tax deferred until surrender.

8. Annuity contracts provide insurance against the risk of:

1. death
2. retirement
3. outliving your financial assets
4. none of the above