Life insurance Premiums, Proceeds, and Beneficiaries. Life premiums and benefits.

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

Mode of Premium

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

Which statement regarding the Change of Beneficiary provision is true?

A) The beneficiary can only be changed with the consent of the insurer (B) The policyowner can change the beneficiary C) The insured can change the beneficiary D) A beneficiary change is subject to underwriting procedures

Who has the right to change a revocable beneficiary?

Policyowner

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

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

A policyowner's rights are limited under which beneficiary designation?

Irrevocable

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

Life income

J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?

Revocable

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

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

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:

P only

_______ of personal life insurance premiums is usually deductible for federal income tax purposes.

0%

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?

A) Cash surrender (B) Life settlement contract C) Buy-sell arrangement D) 1031 Exchange

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 statement is true regarding a minor beneficiary?

A) Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age 21. (B) Normally, a guardian is required to be appointed in the Beneficiary clause of the contract C) The minor must pay the debts of the insured's estate before receiving any of the proceeds. D) The minor is entitled to receive the death proceeds immediately

Which of these 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 taxed D) Proceeds are received tax-free if there is a named beneficiary.

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

Annual

T is the policyowner for a Life Insurance policy with an Irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the

Beneficiary

Quarterly premium payments increase the annual cost of insurance because

Interest to the insurer is decreased while the administrative costs are increased.

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

Policyowner

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?

The cost