chap 4

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?

Proceeds will be paid to P's estate

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

entire cash surrender value is taxable

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

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?

irrevocable beneficiary

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

revocable

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

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

the policy owner

Which statement regarding the Change of Beneficiary provision is true?

the policy owner can change the beneficiary