Uses of life
Which of these is NOT a reason for a business to buy a key person life insurance?
A pension deficiency if the key employee dies
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
The premiums paid by an employer for his employee group life insurance are usually considered to be:
Tax deductible to the employer
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
Each partner owns a $500,000 policy on their partner's life
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
Which of these factors does not influence an applicants need for life insurance?
Self-maintenance expenses
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary
A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
Company X
Which statement regarding a key employee life policy is not true?
The beneficiary is named by the key employee
In life insurance, the needs approach is used mostly to establish:
how much life insurance a client should apply for