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Life Premiums and Benefits

Terms in this set (15)

Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
All proceeds are income tac free in the year they are received
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
Revocable
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
Revocable
Who has the right to change a revocable beneficiary?
Policyowner
A level premiums indicates
The premium is fixed for the entire duration of the contract
Which of these is NOT an element of Life insurance premiums
Morbidity Rate
Which statement regarding the Change of Beneficiary provision is true?
The policyowner can change the beneficiary
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?
Proceeds will go to the contingent beneficiary
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the
Beneficiary
The common Disaster clause provides that if that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true?
This clause provides the payment of proceeds to the insured's estate
C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?
The cost
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?
Life settlement contract
When can a policyowner change a revocable beneficiary?
Anytime
T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
$0
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