Uses of Life Insurance

All of the following are examples of a Business Continuation Plan EXCEPT Key person insurance Cross-purchase agreement Stock Redemption Plan Deferred Compensation

Deferred compensation

Craig purchased a life insurance policy for enabling his heirs to pay estate taxes. What is this called? Estate conservation Liquidity maintenance Survivor fund Human value protection

Estate conservation

Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death? Financial loss value Human life value Assessment value Replacement value

Human life value

Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? Future value approach Earnings approach Needs approach Human life value approach

Human life value approach

All of the following are considered appropriate uses of life insurance for business purposes EXCEPT Attracting quality employees by offering a group life plan Funding an entity buy-sell agreement Protecting the business by covering key employees with life insurance Protecting the business by covering entry level employees with life insurance

Protecting the business by covering entry level employees with life insurance

When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? The income earner's future projected income The family's financial objectives if the income earner were to die or become disabled The insurance company's financial rating The income earner's credit score

The family's financial objectives if the income earner were to die or become disabled

Which of these factors is NOT taken into account when determining an applicant's life insurance needs? Social Security automobile savings pension

automobile