5 - Life Insurance Premiums, Proceeds, and Beneficiaries - Exam
A beneficiary receives only the death benefits earnings in which settlement option?
A) Interest option (allows only the death benefit earnings to be paid to the beneficiary).
When calculating life insurance premium rates, which component would an agent's commission fall under?
Insurer's expenses
Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose?
Interest Option
When calculating life insurance premium rates, which component is affected by an insured's age and gender?
Mortality
Which of the following describes the number of deaths in a year compared to the number of people in a select group?
Mortality rate
Mortality is calculated by using a large risk pool of
People and Time
What is the price of insurance for each exposure unit?
Rate
What is the primary feature of a viatical settlement?
Reduced death benefit prepayment
A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen?
The insured's estate
Which of the following is NOT a component of determining policy premiums?
Dividends
How are death benefits that are received by a beneficiary normally treated for tax purposes?
Exempt from federal income taxes
Which of the following is NOT a life insurance settlement option?
Extended term option life insurance settlement option : lump sum option fixed amount option life income option
Premiums are best described as
money paid by the insured to acquire a policy's benefits
The probability of death, listed by year, are demonstrated in
mortality tables
A spendthrift clause in a life insurance policy.
restricts the ability of the beneficiary to assign benefits