Life Insurance Premiums, Proceeds, and Beneficiaries Flashcards
The surrender charges of a Universal Life Policy must be disclosed, true or false?
True
The face amount decreases over the policy period in a
Decreasing term life policy
Policy loans will be subject to penalty taxes if a policy is classified as an?
MEC - Modified Endowment Contract
A Universal Life Insurance Policy is best described as?
A flexible premium deposit fund and a monthly renewable term policy
The policy indicates how much of each premium is used toward company expenses regarding Universal Life Insurance. True or False
True
A ¨premature¨ distribution from a Modified Endowment Contract (MEC) incures a penalty tax of ?
10%
An insurance policy that can also be classified as a securities product is called?
Variable Life
What is an accurate description of the premium in a graded premium Life Insurance policy?
Annual increases in premium for a stated number of years then remains level.
What kind of life policy typically offers mortgage protection?
Decreasing term
Can the future use of the cash value that builds in a recently purchased in a whole life insurance policy provide supplemental income in 35 years, yes or no
Yes
If an individual age 50 surrenders their MEC ( Modified Endowment Contract) how is the gain treated in term of federal income tax?
The gain is treated as a taxable income and a penalty tax is imposed on the gain.
Regarding group credit life insurance, the face amount is based on the outstanding loan balance. True or False
False
True or False: A cash benefit will be provided if the insured is alive at the end of a policy period for a term life insurance policy?
False
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?
Under $50,000, but increases annually until fully insured
