Chapter 10 (Uses of Life Insurance)

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local unemployment rate

Which of these factors does NOT influence an applicant's need for life insurance?

Self-maintenance expenses

Which of these is NOT a reason for a business to buy key person life insurance?

A pension deficiency if the key employee dies

C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her li of these statements would be true?

ABC is the policy-owner C is the insured ABC is the beneficiary

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

Company X

Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partnel 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 third-party ownership of a life insurance policy is true?

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

K is an insured under a life insurance policy owned by a third party. Which of these statements is true?

K has no ownership rights

1 architecture firm would stand to lose a lot of money in the event of the death of its proje hich type of policy should the firm purchase on its project manager?

Key Person Life Policy

In life insurance, the needs approach is used mostly to establish:

how much life insurance a client should apply for

In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT:

insured