Section 6 -

Question 1

Which settlement option makes minimum guaranteed dollar payments over a stated number of years?

Answer 1

Fixed period

Question 2

Which statement is incorrect about the interest only settlement option in a life insurance policy?
-interest rate is guaranteed with a minimum rate
-Interest on proceeds must be paid by the beneficiary
-Interest is payable to a stated beneficiary
-Interest must be paid at least annually

Answer 2

Interest on proceeds must be paid by the beneficiary

Question 3

Which tax is normally associated with an individual death?

Answer 3

Federal estate tax

Question 4

During the early years of a whole life insurance policy, the cash value will normally be

Answer 4

Less than the total premiums paid

Question 5

what effect does interest income have upon insurance premiums?

Answer 5

Decreases premium

Question 6

A life insurance policy’s contingent beneficiary is the…

Answer 6

Person who receives the death benefits, if the primary beneficiary dies before the insured

Question 7

death benefits from a life insurance policy are normally considered to be

Answer 7

Exempt from federal income tax

Question 8

which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted

Answer 8

Fixed amount installment option

Question 9

when premiums are determined, one factor would be the expenses of the

Answer 9

Insurer

Question 10

A life insurance beneficiary died after receiving only six payments under the policies life income settlement option what happens with the remaining balance of the death proceeds?

Answer 10

Kept by the insurance company

Question 11

The beneficiary of a life insurance policy is normally selected by…

Answer 11

The policy owner

Question 12

Al surrenders his life insurance policy for its cash value. The total of premiums paid into the policy minus total dividends received in cash, or used to offset premiums, is referred to as the…

Answer 12

Cost basis

Question 13

which life insurance policy provision, prohibits of beneficiary from commuting encumbering, withdrawing, or assigning any portion of the proceeds prior to actual receipt from the company?

Answer 13

Spendthrift clause

Question 14

A life policies, spendthrift clause would have no effect if the beneficiary is paid the proceeds as a…

Answer 14

One lump sum payment