Use of Life

Term
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Which of these is NOT a reason for purchasing life insurance on the life of a minor?
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Terms in this set (13)
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child.
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT:
Insured
A Key Employee policy is taken out by company X on its Vice President. Ten years later, this employee leaves Company X and begins working for Company Y. if this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
Company X
Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?
Split-dollar plan
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
each partner owns a $500,000 policy on their partner's life
Which of these factors does NOT influence an applicant's need for life insurance?
A)Lifestyle of the applicant
B) Number of dependents
C) Future educational costs of the dependents
D)Self-maintenance expenses
Self-maintenance expenses
An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?
Key Person Life Policy
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. what exactly does needs analysis involve?
establishes the needs of the individual and his dependents
In life insurance, the needs approach is used mostly to establish:
How much life insurance a client should apply for.
C is a key employee at ABC incorporated. if a Key Employee life policy is purchased on her life, which of these statements would be true?ABC is the policy owner, C is the insured, and ABC is the beneficiaryCompany Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?Each partner must own a policy on the other partnersWhich statement regarding third-party ownership of a life insurance policy is true?It is used extensively in estate-planning as well as business circumstances