Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the owner of a universal life (UL) insurance policy with an Option A death benefit of $100,000, a target premium of $1,000 per

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
You are the owner of a universal life (UL) insurance policy with an Option A death benefit of $100,000, a target premium of $1,000 per year, and a current cash value of $10,000. Which of the following statements about this universal life insurance policy is (are) true? (Check all that apply.) You may switch from the Option A death benefit to an Option B death benefit without providing evidence of insurability. It is possible to skip the $1,000 premium this year and pay nothing, This year, you would purchase $100,000 of term insurance, It is possible to make partial withdrawals from your cash value account without surrendering your policy. You have the potential to earn competitive interest rates on your cash value account but there is no guaranteed minimum rate. Which of the following statements about universal life (UL) insurance is (are) true? (Check all that apply.) The policyholder can make additional annual contributions of any amount to the policy cash value. The policyholder can withdraw some of the policy cash value without paying any interest charges With the Option B death benefit, the policyholder purchases an increasing amount of term insurance each time the coverage is renewed. Universal life insurance bundles death protection with a savings component. Interest credited to the policy cash value each period is not currently taxable. Phil suffered a heart attack several years before applying for life insurance, but denied that he ever had one on the policy application. The insurer fails to discover the lie and issues the policy. Three years later, Phil dies of a second heart attack and his wife files a claim for the life insurance death benefit. Which of the following statements is true? the insurer can deny the claim since Phillied on the original application the insurer must pay the claim since it failed to discover the lie and issued the policy when Phil first applied for it the insurer can deny the claim since the statements that Phil made on his application are considered to be "warranties" the insurer must pay the claim since the policy can no longer be contested the insurer can deny the claim since the application is considered to be part of the life insurance contract under the "entire contract" clause An insured has a limited-payment whole life insurance policy and wants to change to a continuous-premium plan with the same death benefit. Under the change-of-plan provision, which of the following statements is (are) true? To change to the new plan, the insured is not required to provide evidence of insurability. To change to the new plan, the insured must make a payment to the insurer. As a result of changing to the new plan, the insurer will make a refund payment to the insured. To change to the new plan, the insured must provide evidence of insurability

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: E Thomas Garman, Raymond Forgue

11th Edition

1111531013, 9781111531010

More Books

Students also viewed these Finance questions

Question

3. How can we use information and communication to generate trust?

Answered: 1 week ago