FFL Life Course Premiums, Proceeds, and Beneficiaries

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:

<> Q's estate

<> P only

<> R's estate

<> P and Q's estate

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?
<> The face amount of a life policy paid on a monthly basis is higher than one paid on an annual basis
<> The gross premium is higher on a monthly payment mode as compared to being paid annually
<> The gross premium is lower on a monthly payment mode as compared to being paid annually
<> The cash value from a life policy paid on a monthly basis builds quicker than one paid on an annual basis

Which statement regarding the Change of Beneficiary provision is true?
<> The beneficiary can only be changed with the consent of the insurer
<> A beneficiary change is subject to underwriting procedures
<> The policy owner can change the beneficiary
<> The insured can change the beneficiary

What is the underlying concept regarding level premiums?
<> Level premiums build cash value quicker in early years
<> The early years are charged less that that is needed
<> The early years are charged more than what is needed
<> Level premiums can only be paid annually

C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?

<> The nonforfeiture options

<> The assignment of ownership

<> The cost

<> The contestable period

On a life insurance policy, who is qualified to change the beneficiary designation?

<> Primary beneficiary

<> Payor

<> Insurer

<> Policy owner

Which of these statement is INCORRECT regarding the federal income tax treatment of life insurance?
<> Premiums are normally not tax deductible
<> Cash dividends are normally not taxed
<> Proceeds are received tax-free if there is a named beneficiary
<> Entire cash surrender value is taxable

A level premium indicates:
<> The premium is fixed for the entire duration of the contract
<> The premium can only be changed with the consent of the insurer
<> The premium stays level until the policy’s renewal date
<> The premium is fixed for a period stated in the contract, the becomes variable

The Common Disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true?
<> The estate taxes in the beneficiary’s estate may be reduced
<> This clause provides the payment of proceeds to the insured’s estate
<> This clause provides the payment of proceeds to the beneficiary’s estate
<> The estate taxes in the insured’s estate may be reduced

Which statement is true regarding a monitor beneficiary?
<> Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21
<> The minor must pay the debts of the insured’s estate before receiving any of the proceeds
<> Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
<> The minor is entitled to receive the death proceeds immediately

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

<> Tertiary

<> Contingent

<> Revocable

<> Irrevocable

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
<> Proceeds will be payable to K’s estate if P dies within a specific time
<> Proceeds will be paid to P’s estate
<> The courts will decide who will receive death benefit

T an S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
<> If the insured died of accidental causes
<> If the primary beneficiary dies before the insured
<> If the primary beneficiary is a minor at the time of the insured’s death
<> If the insured died of natural causes

Which of the following best describes a contingent beneficiary?
<> Person designated by the insurance compony to receive policy proceeds in the event that the primary dies
<> Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
<> Person designated by the primary beneficiary’s executor to receive policy proceeds
<> Person designated by the state to receive policy proceeds in the event that the primary beneficiary dies

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
<> Request will be accepted only if in writing by the insured
<> Change will be made only if premiums are paid current
<> Change will be made immediately
<> Request of the change will be refused

What percent of personal life insurance premiums is usable deductible for federal income tax purpose?

<> 50%

<> 0%

<> 100%

<> 75%

A whole life insurance policy owner does not with to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

<> 1031 exchange

<> Cash surrender

<> Buy-sell arrangement

<> Life settlement contract

A policy owner's rights are limited under which designation?

<> Contingent

<> Irrevocable

<> Revocable

<> Tertiary

Which premium schedule results in the lowest cost to the policy owner?

<> Semi-annual

<> Annual

<> Monthly

<> Quarterly