Chapter Four: Life Insurance Premiums, Proceeds and Beneficiaries
What percent of personal life insurance premiums is usually deductible for federal income tax purposes?
0%
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
A policyowner's rights are limited under which beneficiary designation?
Irrevocable
What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?
Irrevocable beneficiary
A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?
Life settlement contract
A policyowner is allowed to pay premiums more than once a year under which provision?
Mode of Premium
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 before the insured
J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?
Revocable
Which premium schedule results in the lowest cost to the policyowner?
Annual
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?
Proceeds will go to the contingent beneficiary
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 statement regarding the Change of Beneficiary provision is true?
The policyowner can change the beneficiary
A level premium indicates
the premium is fixed for the entire duration of the contract
