Xcel solutions chapter 4 - Premiums and proceeds
A policy owner is allowed to pay premiums more than once a year under the which provision?
Mode of premium
Which of these is NOT an element of Life insurance premiums?
Morbidity rate
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 accidentally and Q and R are killed instantly. The accidental death benefits will be paid to
P only
Which of the following best describes a contingent beneficiary
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies for for the insured
A policy owner is able to choose a frequency of premium payments through what policy
Premium mode
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 payable to K's estate if P dies within a specified time.
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?
Proceeds will go to the contingent beneficiary
T is covered by accidental death and dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take of T request A change of beneficiary?
Request of the change will be refused
A _______ beneficiary may be changed by the policy owner without the consent of the beneficiary
Revocable
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
Revocable
What is the underlying concept regarding level premiums
The early years are charged more than what is needed
J Chooses a monthly premium payment mode on his whole life insurance policy. Which of these statements is correct?
The gross premium is higher on a monthly payment mode as compared to being paid annually
Which of the following statements is correct regarding the tax treatment of a lump sum payment paid to a life insurance policies primary beneficiary
All proceeds are income tax free in the year they are received
How to contingent beneficiary receives a policy proceeds in accidental death and dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
If the insured and primary beneficiary of 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 estate
Quarterly premium payments increase the annual cost of insurance because
Interest of the insurer is decrease while the administrative costs are increased
A policy owner 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
A policy owners 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
M purchased an accidental death and dismemberment (AD&D) policy and named his son as a beneficiary. M has the right to change the beneficiary designation anytime. What type of beneficiaries is his son?
Revocable
The common disaster calls provides that if both the insured and the sole name beneficiary were to die in a common accident which of the following is true
The clause provides the payment of proceeds to the insured's estate
Which statement is true regarding a minor beneficiary
normally a guardian is required to be appointed in the beneficiary clause of the contract
K how's the 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
Which type of life insurance beneficiary requires his or her consent when a change of beneficiary is attempted by the policy owner
Irrevocable beneficiary
A whole life insurance policy owner does not wish to continue making premium payments. Which of the following enables the policy owner to sell the policy for more than its cash value?
Life settlement contract
On a life insurance policy, Who is qualified to change the beneficiary designation?
Policyowner
Who has the right to change a revocable beneficiary?
Policyowner
C is trying to determine wether to convert her convertible term life policy to whole life insurance using her original age or attained age. Which factor would affect her decision the most?
The cost
T and S Our name co-primary beneficiaries on a $500,000 accident or death and dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S Died of natural causes of the fathers killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?
$0
______ of personal life insurance premiums is usually deductible for federal income tax purposes
0%
Which premium schedule results in the lowest cost to the policy owner?
Annual
When can a policyowner change a revocable beneficiary?
Anytime
T Is the policy owner for a life insurance policy with a Irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the
Beneficiary
Which of these statements is incorrect regarding the federal income tax treatment of life insurance
Entire cash surrender value is taxable
Which statement regarding the change of beneficiary provision is true
The policy owner can change the beneficiary
A level premium indicates:
The premium is fixed for the entire duration of the contract
