Chapter 8 Flashcards
An investment professional is assessing the life insurance needs of the Robinson family. As it stands, Mr. Robert Robinson has determined that the family’s immediate requirements in the event of his death are $65,000. The amount needed to meet all future funding requirements (that of Mrs. Robinson’s income and Social Security and pension benefits) is estimated to be $550,000. The family owns a home in which their equity interest is $200,000.
Based of all these figures, the investment professional would recommend life insurance with a face amount of
A. $415,000.
B. $550,000.
C. $615,000.
D. $750,000.
C. $615,000.
mrs. Bartlett purchased a life insurance policy that will pay $100,000 to her beneficiary. Should she die at any time during the next year. The policy guarantees the right to renew every year for the next five years, and built no cash value.
Mrs. Bartlett has purchased a
A. Variable life policy.
B. Term life insurance policy.
C. Whole life policy.
D. Universal life policy.
B. Term life insurance policy.
Which of the following exchanges is not a tax-free exchange under IRC Section 1035?
A. Exchanging a valuable annuity for a whole life insurance policy.
B. Exchanging a universal life insurance policy for a variable life insurance policy.
C. Exchanging a variable annuity for a qualified, long-term care contract.
D. Exchanging a variable life insurance policy for a variable annuity.
A. Exchanging a valuable annuity for a whole life insurance policy.
