Policies for L and D

Question 1

What are the types of policies that may be included under claims in favour of the estate?

Answer 1

Policies of which there are 3 main types:

A. LIP on life of deceased taken out by deceased

B. LIP on life of deceased taken out by another

C. LIP on life of another taken out by deceased

Question 2

A1

Answer 2

Life policy on life of the deceased ceded/donated to spouse/child ito:

an ANC or PNC (registered at the deeds office)

Question 3

A2

Answer 3

Life Policy on the deceased with a nominated beneficiary that is not the estate - maturity value was paid directly to the beneficiary

Question 4

A3(i)

Answer 4

Life policy on life of the deceased where there is not a nominated beneficiary or the estate is the nominated beneficiary or if the nominated beneficiary predeceased the deceased

Question 5

A3(ii)

Answer 5

Life policy on life of deceased. Maturity values is used to settle a liability = credit cover policy

Question 6

B1

Answer 6

Reason: to acquire an assets (ie shares) of the deceased

Life policy taken out ito of a buy and sell agreement by NON partner/NON shareholder/NON director

Question 7

B2

Answer 7

Reason: To acquire an asset of deceased

Life policy taken out in terms of a buy and sell agreement by partner, shareholder or director

Question 8

B3

Answer 8

No reason: will not acquire an asset of deceased (no buy and sell agreement)

Life policy taken out by another

Question 9

B4

Answer 9

Reason: it might not be easy to replace the services of the deceased in business = Key Man Policy

Life policy taken out by business

Life police was taken out to cover potential losses as if key person dies the business could suffer severe losses.

Question 10

C1

Answer 10

Life policy has a surrender and maturity value (the policy has either been cashed or ceded)