Don’t Knows Flashcards
Life insurance immediately creates an estate upon the death of the insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Variable life
Jay let her life insurance policy lapse eight months ago due to nonpayment. She can reestablish coverage under which of the following provisions?
Reinstatement provision
Which of these is not considered to be a cost connected with an individuals death?
Business expenses
B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes?
Interest only
A qualified profit-sharing plan is designed to:
Allow employees to participate in the profits of the company
How are policy owner dividends treated in regards to Income Tax?
Interest on accumulations is taxed
What benefit does the payor clause on a juvenile life policy provide?
Premiums are waived if payor becomes disabled
A whole life insurance policy owner does not wish to continue making premium payments. Which of the following enables the policy owner to sell the policy for more then it’s cash value?
Life settlement contract
Which of the following types of permanent life insurance policies offers the highest initial cash value?
Single premium
D needs life insurance that provides coverage for only a limited amount of time while also paying the lowest possible premium. What kind of policy is needed?
Level term
Which of the following statements about accumulated interest earned on dividends from an insurance policy is true?
Taxed as ordinary income
D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and takes no additional action, which non-forfeiture option will the insurer likely proceed with?
Extended term
All of these are characteristics of an adjustable life policy except:
Face amount can be adjusted using policy dividends
S has a whole life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made?
Automatic policy loan
Which of these types of life insurance allows the policy owner to have level premiums, and to also choose from a selection of investment options?
Variable life
A student pilot can pay regular premium cost for her life insurance policy with the addition of which of the following?
Aviation exclusion
Term life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period:
Varies according to the contract
Additional coverage can be added to a whole life policy by adding a(n)
Decreasing term rider
C is trying to determine whether to convert her convertible term life policy to whole life insurance, using her original age or attained age. What factor would affect her decision the most?
The cost
Under a trustee group life policy, who would be eligible for a certificate of coverage?
Employee
What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability?
Conversion
The conversion privilege
An immediate annuity consists of a
Single premium
An individual who purchases a life annuity is given protection against
The risk of living longer than expected
T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this?
Life annuity with period certain
What type of annuity has a cash value that is based upon the performance of its underlying investment funds?
Variable
In a key employee life insurance policy, the third-party owner can be all of the following except:
The insured