Chapter Exam - Life Premiums and Benefits (LAH_Texas)
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 it's cash value?
life settlement contract
Which statement is true regarding a minor beneficiary?
normally, a guardian is required to be appointed in the Beneficiary clause of the contract
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
What percent of personal life insurance premiums is usually deductible for federal income tax purposes?
0%
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
P only
Which premium schedule results in the lowest cost to the policyowner?
annual
When can a policyowner change a revocable beneficiary?
anytime
Quarterly premiums payment increase the annual cost of insurance because
interest to the insurer is decreases while the administratice costs are increased
A policy owner's rights are limited under which beneficiary designation?
irrevocable
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
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
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
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?
this clause provides the payment of proceeds to the insured's estate