Questions and Answers
When can a policyowner change a revocable beneficiary?
What type of beneficiary is M's son in an Accidental Death and Dismemberment policy?
How much of the death benefit will the mother receive after S's death?
Which statement regarding the Change of Beneficiary provision is true?
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A level premium indicates what?
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A policyowner is able to choose the frequency of premium payments through what policy feature?
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Which premium schedule results in the lowest cost to the policyowner?
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On a life insurance policy, who is qualified to change the beneficiary designation?
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Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?
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What action will the insurance company take if T requests a change of beneficiary under an irrevocable beneficiary policy?
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Study Notes
Life Insurance Premiums, Proceeds, and Beneficiaries
- A policyowner can change a revocable beneficiary at any time without needing consent from the current beneficiary.
- When a beneficiary can be changed anytime, it is classified as a revocable beneficiary.
- In a scenario where T named S and T as co-primary beneficiaries, if S dies before the policyholder, and the policyholder dies, the contingent beneficiary (mother) receives $0 because both primary beneficiaries must be alive at the time of the policyholder's death to receive benefits.
- The change of beneficiary provision allows the policyowner to change the beneficiary without needing consent from the insurer.
- A level premium remains fixed for the entire duration of the life insurance contract.
- The frequency of premium payments is defined by the Premium Mode feature, which allows policyowners to select their preferred payment schedule.
- An annual premium payment schedule is the most economical option available to policyowners, resulting in the lowest overall cost.
- Only the policyowner has the authority to change the beneficiary designation on a life insurance policy.
- Premiums paid for life insurance are generally not tax-deductible, cash dividends are tax-free, and insurance proceeds are received tax-free by named beneficiaries; however, the entire cash surrender value may be taxable.
- If an insured individual requests to change a beneficiary from an irrevocable to a new beneficiary, the request will be refused by the insurance company.
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Description
Test your knowledge of life insurance premiums, proceeds, and beneficiaries with this quiz. Understand the rights of policyowners regarding beneficiary designations and different types of beneficiaries. Perfect for students in finance or insurance studies.
