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Terms in this set (16)
Which of these is NOT a reason for purchasing life insurance on the life of a minor?
If both parents were to die, it would provide death benefits to the child
When an individual is planning to protect his family with life insurance, one method of doing is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and his dependents
Which statement regarding a Key Employee Life policy is NOT true?
The beneficiary is named by the key employee
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Fund a buy-sell agreement
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 beneficiary>
Split-Dollar Plan
A Key Employee policy is taken out by Company X on its vice president. Ten years later, this employee leaves Company X and begins working for Company Y. If this individual were to die and the policy is still in force and unchanged, where would the death proceeds be directed?
Company X
Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE?
Each partner owns a $500,000 policy on their partner's life
Which statement regarding third-party ownership of a life insurance policy is true?
It is used extensively in estate-planning as well as business circumstances
Which of these is NOT a reason for business to buy key person life insurance?
A pension deficiency if the key employee dies
The premiums paid by an employer for his employee's group life insurance are usually considered to be
Tax-deductible to the Employer
Which of these factors does NOT influence an applicant's need for life insurance?
Self-Maintenance
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true?
ABC is the policyowner, C is the insured, and ABC is the beneficiary
Three law partners form a Cross-Purchase Buy and Sell Agreement. This agreement is funded with individual life insurance. How many total life policies are needed for this agreement?
6
Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require?
Each partner must own a policy on the other partners