Ch. 11 Exam Questions (Life) - Uses of Life Insurance

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local unemployment rates

Which of these factors does NOT influence an individual's need for life insurance?

Self maintenance expenses

XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?

Split-dollar

What is considered a valid reason for small corporations to insure the lives of its major stockholders?

Fund a buy-sell agreement

With life insurance, the needs approach is used primarily in determining

How much life insurance a client should apply for

Employers often purchase life insurance on a key employee in order to

Pay for finding and training a replacement if the employee dies prematurely

The premiums paid by an employer for his employee's group life insurance are usually considered to be

Tax-deductible to the employer

Which of the following is NOT a reason for a business to buy key person life insurance?

An increased pension liability if the key employee dies

Which of the following disability buy-sell agreements is best suited for businesses with a limited number of partners?

Cross-purchase agreement

Which of the following is NOT considered to be an expense for surviving family members of a deceased wage earner?

Unemployment tax expenses