10 - Uses of Life Insurance (Test only has 5 questions)

Which statement regarding third-party ownership of a life-insurance policy is true?

It is used extensively in estate-planning as well as business circumstances

Which statement regarding a Key Employee Life policy in NOT true?

The beneficiary is named by the Key employee

A Key Employee policy is taken out by Company X on it's vice president. Ten years later, this employee leaves company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?

Company X

Which of these factors does not influence and applicant's need for life insurance?

Self-maintenance expenses

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Split-dollar plan

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?

Each partner must own a policy on the other partners

Which statement regarding a Key Employee Life policy in NOT true?

The beneficiary is named by the key employee

Which of these is NOT a reason for purchasing life insurance on the life of a minor?

If both parents were to die, it would provide death benefits to the child