Chp3 Life Basics

When must insurable interest be shown for a life insurance policy?

Upon policy application

What is business life insurance used for?

All of the above, An employee benefit, A funding tool, and Business interruption insurance

All of the following are true regarding purchase of personal life insurance for charity, EXCEPT:

The person purchasing life insurance for charity must have insurable interest in the lives of the charity's members.

The time period during which children are young and financially dependent upon their parents is termed the:

Family dependency period

The ___________ approach calculates the amount of money a person is expected to earn over their lifetime to determine the face amount of life insurance needed, thereby placing a dollar value on the life of an individual.

Human life value

The ____________ approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities.

Needs

All of the following statements regarding key person insurance are true, EXCEPT:

The key employee is the policyowner and pays the premiums; the company is the beneficiary.

Ben applies for a life insurance policy on himself. How much insurable interest does Ben have in his own life?

Unlimited

The third party that purchases a life insurance policy death benefit from a terminally ill insured is termed:

Viatical settlement provider

All of the following are true regarding viatical settlements, EXCEPT:

Viatical settlements are a type of life insurance contract.

Mary's Cosmetics purchases a life insurance policy on Samantha, the leading makeup salesperson in the nation. Which business continuation plan did Mary's Cosmetics buy?

Key person insurance