Life Insurance Questions:

1. You are reviewing your client Henryk's existing insurance coverage as part of your insurance needs analysis for him. Which of the following statements about group life insurance is correct?

A. If Henryk's employer pays some or all of the premiums, those premiums are considered a taxable benefit to Henryk.

B. Regardless of who pays the premiums, the death benefits paid will be taxable to Henryk, his estate, or the beneficiary of the policy.

C. As with individual insurance premiums paid under a group life insurance plan are not subject to provincial retail sales tax.

D. If Henryk does not join the plan before the end of the probationary period, proof of insurability will be required.

2. Hannah meets with Erin, a licensed insurance agent, to discuss her insurance coverage. Hanna has an existing Term 20 life insurance policy that she purchased 15 years ago with the main purpose of providing for her children if she passed prematurely. Hannah's children are now grown and she recently inherited a cottage. Hannah would now like her insurance coverage to pay any tax owing on the cottage when she passes so that it can be transferred to her children. Hannah's health has deteriorated since she applied for her policy and she is concerned that she may not qualify for additional coverage. Which of the following features on her existing policy would BEST meet Hannah's current insurance needs?

A. guaranteed insurability benefit rider

B. paid-up addition provision

C. guaranteed renewable provision

D. conversion option

3. Karen has a universal life (UL) policy with yearly renewable term (YRT). Her policy has a death benefit of $250,000 and an investment account value of $50,000. In the current year, Karen's cost of insurance (COI) is $15.20. Based on this information, which of the following would be the amount of the mortality deduction that the insurance company would draw from Karen's investment account in the current year

A. $760

B. $3,040

C. $3,800

D. $4,560

4. Petra and Stan have just divorced. They have a son, Marek, who just turned 3. In divorce court, the judge has ordered that Stan is required to pay Petra child support of $2,200 per month until Marek's t18th birthday, and that must acquire adequate life insurance to satisfy this requirement in the event of his death.

Using the capital drawdown method, what is the approximate amount of life insurance that Stan should buy to meet his child support commitment?

A. $100,000

B. $400,000

C. $750,000

D. $1,000,000