4.) Premiums and Proceeds

the premium is fixed for the entire duration of the contract

A level premium indicates:

Premium Mode

A policyowner is able to choose the frequency of premium payments through what policy feature?

Mode of Premium

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

Irrevocable

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?

Proceeds will go to the contingent beneficiary

A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies?

Life settlement contract

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?

the cost

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?

If the primary beneficiary dies before the insured

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

Insured's contingent beneficiary

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?

The gross premium is higher on a monthly payment mode as compared to being paid annually

J chooses a monthly premium payment mode on his Whole life insurance policy. Which of these statement is correct?

Revocable

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

Daughter

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?

Proceeds will be payable to K's estate if P dies within a specified time

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?

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?

Policyowner

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

P only

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:

interest to the insurer is decreased while the administrative cost are increased

Quarterly premium payments increase the annual cost of insurance because

0%

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?

This clause provides the payment of proceeds to the insured's estate

The common Disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true?

0%

What percent of personal life insurance premiums is usually deductible for federal income tax?

Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured.

Which of the following best describes a contingent beneficiary?

All proceeds are income tax free in the year they are received

Which of the following statements is correct regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?

Annual

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

Life Income

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

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

Which statement is true regarding a minor beneficiary?

The policyowner can change the beneficiary

Which statement regarding the Change of Beneficiary provision is true?

Irrevocable

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

level premium

indicates that the premium is fixed for the entire duration of the contract

Request of the change will be refused

t is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T request a change of beneficiary?

The early years are charged more than what is needed.

what is the underlying concept regarding level premiums?

Anytime

when can a policyowner change a revocable beneficiary?

Entire cash surrender value is taxable

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 taxable, D.) Proceeds are received tax-free if there is a named beneficiary

Irrevocable Beneficiary

which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner?