Life premiums and Benefits
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?
A. Tertiary B. Irrevocable C. Revocable D. Contingent
Which premium schedule results in the lowest cost to the policyowner?
A. Semi- Annual B. Monthly C. Quarterly D. Annual
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?
A. $1,000,000 B. $500,000 C. $250,000 D. $0
_____ of personal life insurance premiums is usually deductible for federal income tax purpose
A. 100% B. 75% C. 50% D. 0%
When can a policy owner change a revocable beneficiary ?
A. Anytime B. After the consent of the correct beneficiary C. Only if primary beneficiary dies D. Quatuarly premium payments increase the annual cost of insurance
Who has the right to change a revocable beneficiary ?
A. Beneficiary B. Agent C. Insurance Company D. Policy Owner
A whole life insurance policyowner does not wish the to continue making premium payments. Which of the following enable the policyowner to see the policy for more than it's cash value ?
A. Cash Surrender B. Life Settlement Contract C. Buy-Sell Arrangement D. 1031 Exchange
A policyowner is able to choose the frequency of premium payments through which policy feature ?
A. Consideration B. Payor Benefit C. Premium Benefit D. Assignment Provision
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?
A. Daughter B. Husbands Estate C. K's Estate D. Trust Fund
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
A. If the primary beneficiary receive the policy proceeds B. If the primary beneficiary dies before the insured C. If the insured died of accidental causes D. If the insured did of natural causes
Quarterly premium payments increase the annual cost of insurance because
A. Insurer risk exposure is greater B. Interest to the insurer is increased while cost C. Mortality cost are greater D. Interest to the insurer is decreased while the administrative cost are increased
A policyowner is allowed to pay premiums more than once a year under provision?
A. Insuring B. Consideration C. Payor D. Mode of Premium
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
A. Interest only B. Fixed Period C. Fixed Amount D. Life Income
What is the underlying concept regarding level premiums?
A. Level premiums build cash value quicker in the early years B. The early years are changed more than what is needed C. The early years charged less than what was needed D. Level premiums can he annually
Which of these is NOT an element of Life insurance premiums ?
A. Mortality Rate B. Insurer's Expenses C. Interest Credit D. Morbidity Rate
Which of the following describes a contingent beneficiary ?
A. Person designated by the insured to receive policy proceeds in the event that primary beneficiary dies before the insured B. Person designated by the primary beneficiary execution to receive policy proceeds
If the insurer and primary beneficiary are both killed in the same accident and cannot determine who died first, where are the death benefits proceeds to be directed under the uniform simultaneous death act ?
A. Primary Beneficiary Estate B. Primary Beneficiary Next of Kin C. Insured Estate D. Insured Contingent Beneficary
D and Q are married and have 3 children. P is the primary beneficiary on Q accidental death and dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P,Q and R are killed instantly. The accelerated Death Beneficiary will be paid to:
A. R's Estate B. Q's Estate C. D and Q Estate D. P only
A(n) ______ Beneficiary may be changed by the policyowner WITHOUT the consent of the beneficiary ?
A. Revocable B. Irrevocable C. Tertiary D. Replacable
A policyowners rights are limited under which beneficiary designation?
A. Revocable B. Territory C. Contingent D. Irrevocable
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?
A. Proceeds will be paid to P's estate B. Proceeds will be divided equally between K's and P 's estate C. Proceeds will be payable to K's estate if P dies within a specified time D. The courts will decide who will receive death benefits
J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
A. The gross premium is higher on a monthly payment mode as compared to being paid annually. B. The gross premium is lower on a monthly payment mode as compared to be paid annually C. The cash value from a life policy paid on a monthly basis builds quicker than one paid on annual basis D. The face amount on a life policy paid on a monthly basis
Which of the statements is INCORRECT regarding the federal income tax treatment of life insurance ?
A.Premiums are normally not tax deductible B. Cash Dividends are normally not taxed C. Entire cash surrender value is taxable D. Proceeds are received tax free is there is a rare