Life Insurance Basics
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)
A Aleatory contract. B Executive bonus. C Key person policy. D Fraternal association.
A producer must do all of the following when delivering a new policy to the insured EXCEPT
A Disclose commissions earned from the sale of the policy. B Explain the policy provisions, riders, and exclusions. C Collect any premium due. D Explain the rating procedures if the policy is rated differently than applied for.
Which of the following would NOT fall into the category of costs associated with death?
A Final medical expenses of the insured B Day to day expenses of maintaining the family C The expense of a vacation for surviving family members D Funeral expenses
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
A Term insurance only B Permanent insurance only C Universal life insurance only D Any form of life insurance. ⭐️
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
A. The benefit is subject to the exclusionary rule. B. IRS has no jurisdiction. C The benefit is received as taxable income. D. The benefit is received tax free.
Which of the following is true regarding an application for a large amount of insurance?
A.) The insurer might require a medical examination by a professional. B) The insurer will accept a non-medical application. C) The applicant must submit a statement of good health. D) The agent, and not the applicant, will complete all of the medical information.