Types of Life Insurance Policies Review Exam

Question 1

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n)

Installment Refund annuity
Equal Value annuity
Joint Refund annuity
Straight Refund annuity

Answer 1

The correct answer is “Installment Refund annuity”. An installment Refund annuity promises that if the annuitant dies before receiving payments equal to the correct value, the payments will be continued to a beneficiary until an amount equal to the contract value has been paid.

Question 2

T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company

MUST make half-payments to the beneficiary
MUST make full payments to the beneficiary
does NOT have to make any further payments
has the option to continue making payments based on what has already been paid out

Answer 2

The correct answer is “does NOT have to make any further payments”. With a Straight Life Annuity, the insurer does not have to make further payments after the annuitant dies.

Question 3

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT

Income derived from the TSA is received income tax-free
TSA’s are available to public school employees
Contributions to the TSA are tax-deductible
Interest earned by TSA is tax deferred

Answer 3

The correct answer is “Income derived from the TSA is received income tax-free”. All of these statements regarding TSA’s are true EXCEPT “Income derived from the TSA is received income tax-free”. Upon retirement, payments received by employees from the accumulated savings in tax-sheltered annuities are treated as ordinary income.

Question 4

The type of annuity that can be purchased with one monetary deposit is called a(n):

Immediate annuity
Single Premium annuity
Single Deposit annuity
Fixed annuity

Answer 4

Incorrect. The correct answer is “immediate annuity”. An immediate annuity is purchased with one monetary deposit.

Question 5

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

Flexible Premium with Survivor Annuity
Flexible Premium with Period Certain
Single Premium Deferred Annuity with Period Certain
Single Premium Immediate Joint with Survivor Annuity

Answer 5

The correct answer is “Single Premium Immediate Joint with Survivor Annuity”. This annuity was purchased with one payment and begins immediately. It also covers K and her spouse for the rest of their lives. This annuity is classified as Single Premium Immediate Joint with Survivor Annuity.

Question 6

Which type of contract liquidates an estate through recurrent payments?

Whole life insurance
401(k)
Universal life insurance
Annuity

Answer 6

The correct answer is “Annuity”. A contract that provides for the liquidation of all or part of an estate through periodic payments is known as an annuity.

Question 7

The payments on Q’s annuity are no less than $250 quarterly. Which of the following annuities does Q own?

Quarterly Flexible
Adjustable Deferred
Flexible Installment Deferred
Immediate Fixed

Answer 7

Incorrect. The correct answer is “Flexible Installment Deferred”. This is an example of a Flexible Installment Deferred annuity.

Question 8

The annuity that represents the largest possible monthly payment to an individual annuitant is a(n):

Cash Refund
Straight Life annuity
Life Annuity with Period Certain
Installment Refund

Answer 8

The correct answer is “Straight Life annuity”. The Straight Life Annuity pays the largest monthly benefit to a single annuitant because it is based only on life expectancy, but it creates a risk that the annuitant may die early and forfeit much of the value of the annuity to the insurance company.

Question 9

How does an indexed annuity differ from a fixed annuity?

Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index
Fixed annuity owners have a separate investment account
Indexed annuity owners receive annual dividends
Fixed annuity owners receive credited interest tied to the fluctuations of the linked index

Answer 9

The correct answer is “Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index”. An indexed annuity differs from a fixed annuity in that indexed annuity owners may receive credited interest tied to the fluctuations of the linked index.

Question 10

An individual who purchases a Life annuity is given protection against:

the risk of dying prematurely
the risk of living longer than expected
inflation
the risk of not having enough retirement income

Answer 10

The correct answer is “the risk of living longer than expected”. A Life annuity offers protection against the risk of living longer than anticipated.

Question 11

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

403(b) Plan
Deferred Premium
Single Premium
Period Certain

Answer 11

Incorrect. The correct answer is “Single Premium”. Immediate Annuities are purchased with a single lump sum payment and will start providing income payments within the first year, but usually starting 30 days from the purchase date.

Question 12

N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase?

Fixed Deferred
Fixed Variable
Fixed Period
Fixed Immediate

Answer 12

The correct answer is “Fixed Deferred”. A Fixed Deferred annuity pays out a fixed amount for life starting at a future date.

Question 13

T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide?

Income that cannot be outlived by the owner
Tax-free income
Inflation protection
Income for a fixed period stated in the contract

Answer 13

The correct answer is “Income that cannot be outlived by the owner”. A Straight Life Annuity will provide an income that the insured cannot outlive.

Question 14

A contract owner terminates an annuity before the income payment period begins. The owner will then receive

the premiums paid to date
nothing
the current contract surrender value
half of the current surrender value

Answer 14

The correct answer is “the current contract surrender value”. If an annuity is terminated prior to beginning of the income payment period, the contract owner receives the contract surrender value at that time.

Question 15

What advantage does the renewability feature give to a term policy?

The insured may apply for this policy with little or no underwriting
The insured may borrow against the cash value
The insured may extend the coverage period at no additional cost
The insured may extend the coverage period

Answer 15

The correct answer is “The insured may extend the coverage period”. The advantage a renewability feature gives to the insured is it allows him/her to extend the coverage period. Usually a premium increase is involved upon renewal.

Question 16

A life insurance policy that provides a policyowner with cash value along with a level face amount is called:

Level term
Whole life
Credit life
Ordinary life

Answer 16

The correct answer is “Whole life”. Whole life provides the insured with a cash value as well as a level face amount.

Question 17

A father who dies within 3 years after purchasing a life insurance policy on his infant daughter can have the policy premiums waived under which provision?

Payor provision
Waiver of Premium provision
Accelerated Benefits provision
Assignment provision

Answer 17

The correct answer is “Payor provision”. A payor provision provides that in the event of death or disability of the adult premium payor, the premiums on a juvenile policy will be waived until the insured child reaches a specified age or the maturity date of the contract.

Question 17

A(n) _______ _______ Life policy combines investment choices with a form of Term coverage

Straight Whole
Variable Universal
Adjustable Universal
Variable Term

Answer 17

The correct answer is “Variable Universal”. Variable Universal Life combines investment choices with a form of Term coverage.

Question 17

Which of the following information is NOT required to be included in a Whole Life policy?

Policy’s premium
Policy’s guaranteed dividend table
Policy’s loan interest rate
Policy’s cash value table

Answer 17

The correct answer is “Policy’s guaranteed dividend table”. All of this information must be included in a Whole Life policy EXCEPT for “Policy’s guaranteed dividend table”.

Question 18

Which of the following types of policies pays a benefit if the insured goes blind?

Endowment
Adjustable life
Universal life
AD&D

Answer 18

The correct answer is “AD&D”. An Accidental Death & Dismemberment (AD&D) policy can provide financial benefits if an insured is killed, loses a limb, suffers blindness, or is paralyzed in a covered accident.

Question 19

When is the face amount of a Whole Life policy paid?

When the insured dies or at the policy’s maturity date, whichever happens first
Only when the insured dies
When the policy is surrendered
At the policy’s maturity date only

Answer 19

The correct answer is “When the insured dies or at the policy’s maturity date, whichever happens first”. The face amount of a Whole Life policy will be paid when the insured dies or on maturity of the policy, whichever occurs first.

Question 19

Variable Life products require a producer to

hold a Life Insurance license and a Securities license
guarantee not more than a 12% return per annum
be regulated solely by State Law
hold a Life and Health Insurance license

Answer 19

The correct answer is “hold a Life Insurance license and a Securities license”. Variable Life products require a producer to hold a Life Insurance license and a Securities license.

Question 20

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Increasing
Level
Adjustable
Decreasing

Answer 20

The correct answer is “Level”. A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.

Question 21

What type of life policy covers two people and pays upon the death of the last insured?

Shared
Adjustable
Joint
Survivorship

Answer 21

The correct answer is “Survivorship”. A survivorship life policy insures two individuals and is designed to pay a benefit upon the second death.

Question 22

Which statement is TRUE regarding a Variable Whole Life policy? It has guaranteed dividends Its premiums and benefits are variable It is a combination of an Endowment and a Increasing Term policy A minimum guaranteed Death benefit is provided

Answer 22

The correct answer is "A minimum guaranteed Death benefit is provided". A Variable Whole Life policy provides a minimum guaranteed death benefit.

Question 23

J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remains level thereafter. The policy's death benefit also remains at $100,000. Which type of Life Insurance policy is this? Modified Premium Life Graded Premium Life Straight Life Endowment

Answer 23

The correct answer is "Modified Premium Life". Modified whole life policies are distinguished by premiums that are lower than typical whole life premiums during the first few years (usually five) and then higher than typical thereafter.

Question 24

Which statement is correct regarding the premium payment schedule for whole life policies? A single premium is paid at time of application/ coverage lasts until retirement Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured Premiums are payable for a set period/ coverage expires at that point Premiums are payable until age 65/ coverage lasts a lifetime

Answer 24

The correct answer is "Premiums are payable throughout the insured's lifetime/ coverage lasts until death of the insured". With whole life insurance, premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death.

Question 25

What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? Term Life Credit Life Universal Life Whole Life

Answer 25

The correct answer is "Whole Life". Whole life insurance is designed to mature at age 100.

Question 26

What kind of life insurance product covers children under their parent's policy? Family Maintenance rider Payor benefit Family Income rider Term rider

Answer 26

The correct answer is "A Term rider". Family plan policies usually cover the family head with permanent insurance and the coverage on the spouse and children is term insurance in the form of a rider.

Question 27

Credit Life insurance is: used in the event of loss of income coverage that waives the premiums on a loan payment in the event of total disability issued in an amount not to exceed the amount of the loan issued in any amount at the discretion of the applicant

Answer 27

The correct answer is "issued in an amount not to exceed the amount of the loan". Credit life insurance is designed to cover the life of a debtor and pay the amount due on a loan if the debtor dies before the loan is repaid.

Question 28

Which of these is an element of a Variable Life policy? Rate of returns are guaranteed A fixed, level premium No investment risk to the policyowner Insurer assumes the investment risk

Answer 28

The correct answer is "A fixed, level premium". Variable Whole Life policies have a fixed, level premium.

Question 29

Which of the following types of permanent life insurance policies offers the highest initial cash value? Straight whole Single premium Interest-sensitive Limited pay

Answer 29

The correct answer is "Single premium". Single premium whole life allows the insured to pay the entire premium in one lump-sum and have coverage for his/her entire life. This type of permanent coverage has the highest initial cash value.

Question 30

Which of the following is considered an element of a Variable Life Policy? Underlying equity investment Little or no risk to insured Insurer assumes all the risk Guaranteed dividends

Answer 30

The correct answer is "Underlying equity investment". One characteristic of a Variable Life policy is it contains an underlying equity investment.

Question 31

Which of the following actions require a policyowner to provide proof of insurability in an Adjustable Life policy? decrease premium payment decrease face amount increase face amount increase premium-paying period

Answer 31

The correct answer is "increase face amount". All of these actions can be taken by a policyowner without proof of insurability except for increasing the face amount.

Question 32

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the inflation factor inherent risk commission rate expense charges

Answer 32

The correct answer is "expense charges". The Universal Life Policy is called an unbundled Life Policy because the policyholder can see the expense charges, the interest earned, and the cost of insurance.

Question 33

At what point does a Whole Life Insurance policy endow? At age 65 When the cash value equals the death benefit In 30 years or age 65, whichever comes first When premium paid equals the death benefit

Answer 33

The correct answer is "When the cash value equals the death benefit". A Whole Life Insurance Policy endows when the cash value equals the death benefit.

Question 34

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: If the gain on the index goes beyond the policy's minimum rate of return, the cash value will mirror that of the index The premiums can be lowered or raised, based on investment performance Tied to an equity index such as the S&P 500 Cash value has a minimum rate of accumulation

Answer 34

The correct answer is "The premiums can be lowered or raised, based on investment performance". Equity Indexed Life Insurance is permanent life insurance that allows policyholders to tie accumulation values to a stock market index.

Question 35

What does a Face Amount Plus Cash Value Policy pay upon the insured's death? Face amount plus the policy's cash value Face amount plus the policy's dividends The greater amount of the policy's death benefit or the cash value Face amount plus total premium paid throughout the life of the policy

Answer 35

The correct answer is "Face amount plus the policy's cash value". A Face Amount Plus Cash Value Policy is a contract that promises to pay at the insured's death the face amount of the policy plus a sum equal to the policy's cash value.

Question 35

A variable insurance policy: does not allow the policyowner to assume the investment risk does not guarantee a return on its investment accounts does not guarantee an assignment provision guarantees a minimum rate of return

Answer 35

The correct answer is "does not guarantee a return on investment accounts". In contrast, variable insurance products do not guarantee contract cash values, and it is the policyowner who assumes the investment risk. Variable life insurance contracts do not make any promises as to either interest rates or minimum cash values.

Question 36

Which of these is NOT considered to be a cost connected with an individual's death? Funeral expense Business expenses Probate costs Tax liability

Answer 36

The correct answer is "Business expenses". All of these are considered to be costs associated with an individual's death EXCEPT business expenses.

Question 37

Under a Graded Premium Whole Life policy, the premium increases each year during the early years of the contract and remains the same after that time the premium can be adjusted by the policyowner at anytime the premium decreases each year during the early years of the contract and remains the same after that time the premium always remains the same while the death benefit increases during the early years

Answer 37

The correct answer is "the premium increases each year during the early years of the contract and remains the same after that time". With a graded premium whole life policy, the premium increases each year during the early years of the contract (usually five years) and remains the same after that time.

Question 38

Y purchased $100,000 worth of permanent protection on himself and $50,000 worth of 10-year Term coverage for his wife on the same policy. Which of these policies did Y purchase? Endowment with a Payor Benefit Endowment with Extended Term Family Income policy Whole Life policy with an Other Insured Rider

Answer 38

The correct answer is "Whole Life policy with an Other Insured Rider". In this situation, the applicant purchased a Whole Life Policy with an Other Insured Rider.

Question 39

P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? Family Survivor policy Family Maintenance policy Family Benefit policy Family Income policy

Answer 39

The correct answer is "Family Maintenance policy". In this situation, a Family Maintenance policy should be purchased. In this situation, a Family Maintenance policy should be purchased. A Family Maintenance policy pays a monthly income from the date of death of the insured to the end of the preselected period. The payment of the face amount of the policy is payable at the end of such preselected period.

Question 40

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit? Variable life Fixed annuity Universal life Modified endowment contract

Answer 40

The correct answer is “Variable life.” The variable nature of a variable whole life insurance is its death benefit. However, if investment performance is poor, the death benefit will not go lower than the policy's guaranteed minimum.

Question 41

The combination of Whole Life and _______ Term insurance is referred to as a Family Income Policy Universal Variable Decreasing Level

Answer 41

The correct answer is "Decreasing". A Family Income Policy is a combination of Whole Life and Decreasing Term insurance.

Question 42

Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? Modified Whole Life Decreasing Term 20-Pay Life Endowment

Answer 42

The correct answer is "Decreasing Term". The Automatic Premium Loan provision can be incorporated into all of these policies EXCEPT decreasing term.

Question 43

How long does the coverage normally remain on a limited-pay life policy? age 65 when premium payments stop age 100 at the discretion of the insurer

Answer 43

The correct answer is "age 100". Even though the premium payments are limited to a certain period, the insurance protection extends until the insured’s death, or to age 100.

Question 44

Which of the following Life insurance policies combine term insurance with an investment element? Decreasing Term Life Increasing Term Life Universal Life Graded Life

Answer 44

The correct answer is "Universal Life". A Universal Life policy combines term life insurance with an investment element.

Question 45

Which of these is NOT relevant when determining the amount of personal life insurance needed? Local unemployment rate Household income Household debt Existing life insurance coverage

Answer 45

The correct answer is 'Local unemployment rates". In calculating the amount of personal life insurance needed, all of the following information would be directly relevant EXCEPT local unemployment rates.

Question 46

Which of the following policies is characterized by a flexible premium and death benefit and allows the policyowner control of the investment aspect of the plan? Universal life Variable life Adjustable life Variable universal life

Answer 46

The correct answer is “Variable universal life.” Any policy whose title includes the term "Universal" indicates that the policy has a flexible or adjustable premium. The variable nature of the product indicates that the cash savings value is invested in the stock market (e.g., mutual funds) which permits for a contract owner to decide where the equity (i.e., cash value) is to be invested.

Question 47

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary? Employer purchase plan Deferred compensation plan Key employee plan Split-dollar plan

Answer 47

The correct answer is "Split-dollar". A split-dollar plan is an arrangement where an employer and an employee share in the cost of purchasing a life insurance policy on the employee. The employee is also allowed to name the policy beneficiary.

Question 48

Which of these is NOT a reason for purchasing life insurance on the life of a minor? Provides funds for final expenses if the child were to die If both parents were to die, it would provide death benefits to the child Provides child with insurance now, in case the child becomes uninsurable later Provides living benefits for the child's college education

Answer 48

The correct answer is "If both parents were to die, it would provide death benefits to the child". An insurance policy on a child would not pay any benefits if one or both of the parents died. All of the other answers are valid reasons for buying life insurance on a child.

Question 49

Whole Life insurance policies are contractually guaranteed to provide each of the following, EXCEPT: partial withdrawal features beyond a surrender charge period nonforfeiture benefit options premiums that remain fixed for the life of the policy cash value that will ultimately replace the death benefit

Answer 49

The correct answer is "partial withdrawal features beyond a surrender charge period". All of these are contractually guaranteed to be provided in a whole life insurance policy EXCEPT "partial withdrawal features beyond a surrender charge period".

Question 50

Which of the following actions is NOT possible with a Universal Life policy? Face amount may be adjusted Policy's cash value may be used to pay premiums Premiums may be applied as a credit against income tax Premium payments may be made at unscheduled times

Answer 50

the correct answer is "Premiums may be applied as a credit against income tax". All of these actions are possible with a Universal Life policy EXCEPT "Premiums may be applied as a credit against income tax".

Question 50

The premiums paid by an employer for his employee's group life insurance are usually considered to be: tax-deductible to the employee taxable income to the employee tax-deductible to the employer partially deductible to the employee

Answer 50

The correct answer is "tax-deductible to the employer". The amount an employer pays for his employee's life insurance is typically deductible to the business.

Question 51

When is the face amount paid under a Joint Life and Survivor policy? when one of the insureds becomes disabled and no longer able to make premium payments upon death of the last insured when policy reaches maturation upon death of the first insured

Answer 51

he correct answer is "upon death of the last insured". A Joint Life and Survivor policy pays benefits after the death of the last insured.

Question 52

Which of these characteristics is consistent with a Straight Life policy? Premiums are lower for the first five years, increase the sixth year, then levels off for the remaining length of the contract Owner can adjust both premium and death benefit Premiums are payable for as long as there is insurance coverage in force Owner has the option of converting to term insurance

Answer 52

The correct answer is "Premiums are payable for as long as there is insurance coverage in force". Straight whole life provides permanent level protection with level premiums from the time the policy is issued until the insured's death (or age 100).

Question 53

Additional coverage can be added to a Whole Life policy by adding a(n): decreasing term rider accelerated benefit rider automatic premium loan rider payor rider

Answer 53

The correct answer is "Decreasing term rider". A decreasing term rider can add additional coverage to a whole life policy.

Question 54

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? Places a dollar value on the life of the individual Takes into account the present value of future income earned by the breadwinner Establishes the needs of the individual and his dependents Establishes the investment risk level acceptable to the individual

Answer 54

The correct answer is "Establishes the needs of the individual and his dependents". Needs analysis is a method of life insurance planning which identifies the needs of an individual and the individual's dependents.

Question 55

When a life insurance policy exceeds certain IRS table values, the result would create which of the following? Endowment 1035 Exchange Modified Endowment Contract (MEC) An investment

Answer 55

The correct answer is "Modified Endowment Contract (MEC)". When a life insurance policy exceeds certain IRS table values, the result would create a Modified Endowment Contract (MEC).

Question 56

Which type of policy is considered to be overfunded, as stated by IRS guidelines? Variable Universal Life Modified Whole Life Modified Endowment Contract Interest-Sensitive Whole Life

Answer 56

The correct answer is "Modified Endowment Contract". A policy that is overfunded to where it does not meet the 7-pay test is considered a Modified Endowment Contract.

Question 57

Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? Modification Adjustable Conversion Exchange

Answer 57

The correct answer is "Conversion". The conversion provision allows the policyowner to change the policy to a permanent life policy without providing evidence of insurability.

Question 57

Which of these would be considered a Limited-Pay Life policy? 10-year Renewable and Convertible Term Life Paid-Up at Age 70 Straight Whole Life Renewable Term to Age 100

Answer 57

The correct answer is "Life Paid-Up at Age 70". An example of a Limited-Pay Life policy is a Life Paid-Up at Age 70.

Question 58

What type of life policy has a death benefit that adjusts periodically and is written for a specific period of time? Decreasing term Endowment Modified whole life 20-year paid up policy

Answer 58

The correct answer is "Decreasing term". A decreasing term policy has a death benefit that adjusts periodically and is written for a specific period of time.

Question 59

Which of these is NOT a reason for a business to buy key person life insurance? A pension deficiency if the key employee dies The loss of company revenues while a replacement is being sought A void in leadership if the key person were to die The reduction in sales as a direct result from death of the key employee

Answer 59

The correct answer is "A pension deficiency if the key employee dies". All of these are reasons for a business organization to purchase key person life insurance EXCEPT "The increased pension liability resulting from the key person's death".

Question 60

Which of these factors does NOT influence an applicant's need for life insurance? Number of dependents Future educational costs of the dependents Self-maintenance expenses Lifestyle of the applicant

Answer 60

The correct answer is "Self-maintenance expenses". An individual's need for a death benefit for survivors is influenced by all of the following factors EXCEPT self-maintenance expenses.

Question 61

What is considered a valid reason for small businesses to insure the lives of its major shareholders? Reduce the company's tax liability Fund a buy-sell agreement To provide an income for the surviving dependents To pay for final expenses

Answer 61

The correct answer is "Fund a buy-sell agreement". Life insurance is purchased to fund a buy-sell agreement in the event of the death of a major shareholder in a business.

Question 62

In a Key Employee life insurance policy, the third-party owner can be all of the following, EXCEPT: Owner Payor Insured Applicant

Answer 62

The correct answer is "Insured". In a Key Employee life insurance policy, the third-party owner can be all of these EXCEPT the insured.

Question 63

Which statement regarding a Key Employee Life policy is NOT true? The application must be signed by the key employee The company purchases, owns, pays the premiums and is the beneficiary Its purpose is to prevent the financial loss that may ensue if a key employee dies The beneficiary is named by the key employee

Answer 63

The correct answer is "The beneficiary is named by the key employee". The company names the beneficiary, not the employee.