Ch. 12 - Uses of Life

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

Which of these is NOT considered to be a cost connected with an individual's death? a. funeral expense b. tax liability c. business expenses d. probate costs

business expenses

According to the needs approach, an emergency reserve fund's primary purpose is to a. pay off debt b. cover the cost of unexpected expenses c. pay for the cost of life insurance d. provide a supplemental income source

cover the cost of unexpected expenses

Which of the following disability buy-sell agreements is best suited for businesses with a limited number of partners? a. split dollar plan b. entity agreement c. cross-purchase agreement d. key person plan

cross-purchase agreement

When using the needs approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT a. final expenses b. charitable donation c. education d. employee benefits

employee benefits

What is considered a valid reason for small corporations to insure the lives of its major stockholders? a. to provide an income for the surviving dependents b. reduce the company's tax liability c. to pay for final expenses d. fund a buy-sell agreement

fund a buy-sell agreement

Which of the following is NOT a reason for a business to buy key person life insurance? a. The reduction in sales as a direct result from death of the employee b. A void in leadership if the key person were to die c. The loss of company revenues while a replacement is being sought d. An increased pension liability if the key employee dies

An increased pension liability if the key employee dies

With life insurance, the needs approach is used primarily in determining a. which insurance company to purchase the coverage from b. how much life insurance a client should apply for c. the type of life insurance that should be purchased d. a budget for the surviving dependents to follow in the event of the client's death

how much life insurance a client should apply for

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? a. identifies the needs of an individual and the individual's dependents b. takes into account the present value of future income earned by the breadwinner c. places a dollar value on the life of the individual d. establishes the investment risk level acceptable to the individual

identifies the needs of an individual and the individual's dependents

Which of these is NOT relevant when determining the amount of personal life insurance needed? a. existing life insurance coverage b. local unemployment rates c. household income d. household debt

local unemployment rates

Employers often purchase life insurance on a key employee in order to a. provide an income to the deceased key employee's family b. pay for funeral costs c. provide the employer with a tax credit d. pay for finding and training a replacement if the employee dies prematurely

pay for finding and training a replacement if the employee dies prematurely

Which of these factors does NOT influence an individual's need for life insurance? a. lifestyle of the applicant b. number of dependents c. future educational costs of the dependents d. self-maintenance expenses

self-maintenance expenses

XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this? a. split-dollar b. cross purchase c. key employee d. deferred compensation

split-dollar

The premiums paid by an employer for his employee's group life insurance are usually considered to be a. tax-deductible to the employer b. partially deductible to the employee c. tax-deductible to the employee d. taxable income to the employee

tax-deductible to the employer

Which of the following is NOT considered to be an expense for surviving family members of a deceased wage earner? a. estate taxes b. unemployment tax expenses c. funeral expense d. living expenses

unemployment tax expenses


Set pelajaran terkait

Benefits and Challenges of Living in A Diverse Society

View Set

AP Psychology: Unit 1B (Practice Test)

View Set

Simon's Saga Episode 4 Vocabulary

View Set

Ch. 20: Accounting Changes and Error Corrections

View Set