Podcast
Questions and Answers
A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the?
A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the?
Mortality is calculated by using a large risk pool of?
Mortality is calculated by using a large risk pool of?
A policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation?
A policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation?
Over the course of a year, which premium payment mode is most expensive?
Over the course of a year, which premium payment mode is most expensive?
Signup and view all the answers
Naming a contingent beneficiary as 'all surviving children' is described by which term?
Naming a contingent beneficiary as 'all surviving children' is described by which term?
Signup and view all the answers
How is the cost of a policy affected when a policyowner pays premiums more frequently?
How is the cost of a policy affected when a policyowner pays premiums more frequently?
Signup and view all the answers
Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause?
Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause?
Signup and view all the answers
Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?
Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?
Signup and view all the answers
Which of these premium payment frequencies is not typically available to a policyowner?
Which of these premium payment frequencies is not typically available to a policyowner?
Signup and view all the answers
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
Signup and view all the answers
A beneficiary change can occur?
A beneficiary change can occur?
Signup and view all the answers
If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if?
If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if?
Signup and view all the answers
An example of naming a beneficiary by class would be?
An example of naming a beneficiary by class would be?
Signup and view all the answers
Which of these is considered a major tax advantage of life insurance?
Which of these is considered a major tax advantage of life insurance?
Signup and view all the answers
Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later. Which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits?
Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later. Which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits?
Signup and view all the answers
What happens to the total amount of premium paid for an insurance policy when the payment frequency increases?
What happens to the total amount of premium paid for an insurance policy when the payment frequency increases?
Signup and view all the answers
Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid?
Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid?
Signup and view all the answers
Which of these is affected by the frequency of an insurance policy's premium payments?
Which of these is affected by the frequency of an insurance policy's premium payments?
Signup and view all the answers
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen?
Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen?
Signup and view all the answers
A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed?
A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed?
Signup and view all the answers
What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?
What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?
Signup and view all the answers
Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called?
Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called?
Signup and view all the answers
Study Notes
Life Insurance Claims and Beneficiary Designations
- A life insurance claim with per capita distribution is payable to named living primary beneficiaries.
- Irrevocable beneficiaries require written consent for any policy changes by the policyowner.
- "All surviving children" as contingent beneficiaries is a class designation.
Mortality and Premiums
- Mortality calculations are based on a large risk pool of people over time.
- Monthly premium payment mode is typically the most expensive over a year.
- Increased frequency of premium payments leads to higher overall policy costs.
Settlement Options
- Interest only settlement option maintains proceeds with the insurer while providing monthly earnings to the beneficiary.
- Fixed amount option disburses a specific amount until the principal and interest are exhausted.
Tax Advantages and Regulations
- Life insurance proceeds are generally not subject to federal income tax when paid directly to beneficiaries.
- Section 1035 exchanges allow policy replacement without tax consequences.
Beneficiary Changes and Rights
- Beneficiary changes can usually be made any time during the policy term.
- The common disaster clause ensures contingent beneficiaries are protected if both the insured and primary beneficiary die in the same accident.
Naming Beneficiaries
- Individual beneficiaries allow explicit directions for policy proceeds.
- Class designations simplify naming multiple beneficiaries (e.g., "children").
Estate Planning and Conservation
- Estate conservation aims to avoid forced asset sales upon death or at the time of estate settlement.
Frequency of Payments
- Higher premium payment frequencies result in increased total premiums over the policy's lifetime.
- Only monthly, quarterly, and semi-annual payment options are typically available to policyholders; bi-weekly is not standard.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge with these flashcards from XCEL Chapter 6. This quiz focuses on life insurance claims, mortality calculations, and key concepts necessary for understanding insurance policies. It's a great way to prepare for exams and enhance your insurance knowledge.
