4 – Life Insurance Premiums, Proceeds and Beneficiaries example #46107

benefits will be paid to P because P survived the accident and is the primary beneficiary.

Revocable With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

The cost In this situation, the cost of insurance is most important when an insured owner is trying to decide whether to convert term insurance at the insured's original age or the insured's attained age.

The Life Income settlement option pays a specified amount to the annuitant with no residual value payable to a beneficiary.

Annual If the policyowner chooses to pay the premium more than once per year (example monthly, quarterly, semi-annually) there normally will be an additional charge because the company will have additional charges in billing and collecting the premium payments.

the premium is fixed for the entire duration of the contract

Proceeds will go to the contingent beneficiary

Life settlement contract

The estate taxes in the beneficiary's estate may be reduced Under the Common Disaster clause, the estate taxes in the beneficiary's estate may be reduced.

The total cash surrender value is NOT taxable. The interest gained is taxable.

0% In general, personal life insurance premiums are NOT deductible for federal income tax purposes.

Premium Mode Premium Mode is the feature that allows the policyowner to select the timing of premium payment, such as monthly, quarterly, annually etc.

The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.

Irrevocable beneficiary

Anytime With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

Mode of Premium The Mode of Premium provision permits an insured to pay premiums more than once every year.

Daughter with a common disaster provision, a policyowner can be sure that if both the insured and the primary beneficiary die within a short period of time, the death benefits will be paid to the contingent beneficiary.

interest to the insurer is decreased while the administrative costs are increased The higher the frequency of payments, the higher the premiums.

Insured's contingent beneficiary Under the Uniform Simultaneous Death Act, if both insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if the insured died last. In other words, the proceeds will be paid to the secondary or contingent beneficiary.

The correct answer is "Proceeds will be payable to K's estate if P dies within a specified time". Under the Common Disaster provision, proceeds will be payable to K's estate if P dies within a specified time.

The early years are charged more than what is needed

If the primary beneficiary dies before the insured A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured's death.

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract. In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.

The policyowner can change the beneficiary. A policyowner may change a beneficiary at any time. However, consent may be needed by the current beneficiary if designated as irrevocable.

The gross premium is higher on a monthly payment mode as compared to being paid annually. A premium payment mode that is more frequent than an annual payment will result in a higher gross premium.

Revocable With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured A contingent beneficiary is named by the insured to receive the policy proceeds if the primary beneficiary dies before the insured.

Request of the change will be refused. An irrevocable designation may not be changed without the written consent of the beneficiary.

Irrevocable. An irrevocable designation may not be changed without the written consent of the beneficiary.

The correct answer is "All proceeds are income tax free in the year they are received". If a life insurance policy has a stated beneficiary, all the proceeds are income tax free in the year which they are received.

Irrevocable An irrevocable beneficiary designation requires the consent and signature of that named beneficiary before a change of beneficiary occurs.

Policyowner