Which method of analyzing the cost of life insurance does not consider the cash value of the policy in the analysis? A) traditional net cost method B) net payment cost index C) the Linton Yield D) the surrender cost index ANSWER Answer: B
Date: September 19th, 2020
Mary is interested in comparing life insurance policies. Rather than looking at the cost per thousand, she would like to compare the rate of return earned on the savings portion of the policy. Which of the following would be of the most interest to Mary? A) the policy’s Linton Yield B) the policy’s surrender cost […]
Date: September 19th, 2020
Which of the following statements is (are) true regarding taxation of life insurance? I. Life insurance proceeds paid in a lump-sum to a designated beneficiary are received free of federal income taxes. II. The policyowner must pay taxes annually on the amount by which the cash value of his or her life insurance policy has […]
Date: September 19th, 2020
Lisa does not want her life insurance policy included in her gross estate when she dies. Lisa can remove the life insurance policy from her estate if she does which of the following more than 3 years before she dies? A) borrow the cash value of the policy B) make an absolute assignment of the […]
Date: September 19th, 2020
Which of the following statements is (are) true concerning settlement options? I. A straight life annuity provides the lowest amount of periodic income of all the life income options. II. Fixed-period and fixed-amount are life income options. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Malcolm would like to purchase life insurance. He is concerned that he might need additional life insurance in the future and that he might be uninsurable at that time. What provision can Malcolm add to his life insurance policy that will permit him to purchase additional life insurance at specified times in the future without […]
Date: September 19th, 2020
A life insurance contractual provision protects the beneficiary by not permitting the insurer to introduce outside information to deny payment of the claim. Such outside information might be notes that the agent took while the insured completed the application. This contractual provision is the A) entire contract clause. B) incontestable clause. C) reinstatement clause. D) […]
Date: September 19th, 2020
A life insurance policyholder may no longer need life insurance. Such a policyholder may sell the policy to a third party for more than its cash value. The purchaser becomes the new beneficiary and is responsible for subsequent premium payments. Such a financial transaction is called a(n) A) collateral assignment. B) accelerated death benefits rider. […]
Date: September 19th, 2020
Which of the following statements is (are) true concerning the automatic premium loan provision? I. Unlike other policy loans, interest is not charged on automatic premium loans. II. The basic purpose of an automatic premium loan is to prevent a life insurance policy from lapsing. A) I only B) II only C) both I and […]
Date: September 19th, 2020
Which of the following statements about life insurance policy loans is (are) true? I. Interest is not required on a life insurance policy loan, as the policyholder is borrowing his or her own money. II. If there is an outstanding loan when the insured dies, payment to the beneficiary is reduced by the amount of […]
Date: September 19th, 2020
