Chapter 4 Life Insurance Premiums, Proceeds, and Beneficiaries

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

Annually

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

Life income

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

Premium mode

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements are correct?

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

Which of the following best describes a contingent beneficiary?

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

c is trying to determine whether to convert he 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

Quarterly premiums payment increase the annual cost of insurance because

interest to the insurer is decreases while the administratice costs are increased

What is the percentage of personal life insurance premium is usually deductacle for federal income tax?

0%

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

If the primary beneficiary dies before the insured

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 specific time

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

irrevocable beneficiary

K has a life insurance policy where her husband is the beneficiary and her daughter is the contingent beneficiary. Under Common Disaster clause, if K and her husband where killed in a automobile accident, where would the death proceeds be directed?

Daughter

A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enable the policyowner to sell policy for more than cash value?

Life settlement