Life premiums and benefits

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

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

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

On a life insurance policy, who is qualified to change the beneficiary designation?

Policyowner

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

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

A level premium indicates

the premium is fixed for the entire duration of the contract

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

If the primary beneficiary dies before the insured

A policyowner is allowed to pay premiums more than once a year under which provision?

Mode of Premium

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

daughter

A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?

irrevocable

What percent of personal life insurance premiums is usually deductible for federal income tax purposes?

0%

Which of the following statements is correct regarding the tax treatment of a lump-sum payment paid to a life insurance policy a primary beneficiary?

All proceeds are income tax free in the year they are received

Which premium schedule results in the lowest cost to the policyowner?

Annually

Which of these statements is incorrect regarding the federal income tax treatment of life insurance?

Entire cash surrender value is taxable

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to K's estate if P dies within a specified time

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

Which statement regarding the change of beneficiary provision is true?

The policyowner can change the beneficiary

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?

to cost