Life Insurance Premiums, Proceeds, & Beneficiaries Exam

T is the policy owner for a Life Insurance policy with an irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the:

Beneficiary

Which type of life insurance beneficiary requires their consent when a change of beneficiary is attempted by the policy owner?

Irrevocable beneficiary

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life Income

Who has the right to change a revocable beneficiary?

Policy owner

A policy owner is able to choose the frequency of premium payments through what policy feature?

Premium Mode

A(n) _____ beneficiary may be changed by the policy owner WITHOUT the consent of the beneficiary.

Revocable

A level premium indicates:

The premium is fixed for the entire duration for the contract

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

A policy owner's rights are limited under which beneficiary designation?

Irrevocable

The Common Disaster clause provides that if both the insured and the sole named beneficiary were to die a common accident, which of the following is true?

This clause provides the payment of proceeds to the insured's estate

Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?

All proceeds are income tax free in the year they are received

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 a compared to being paid annually

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disease provision, which of these statements is true?

Proceeds will be payable to K's estate if P dies within a specified time

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

Quarterly premium payments increase the annual cost of the insurance because:

Interest to the insurer is decreased while the administrative costs are increased

A policy owner 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

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

On a life insurance policy, who is qualified to change the beneficiary designation?

Policy owner

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable