Insurance factory exam prep course Exam Answers

Insurance factory exam prep course Exam Answers

Dividends payable to policy owners are
A. Guaranteed.
B declared by the state.
C. declared by the insurance company
D. strictly regulated

What type of reinsurance contract involves two companies automatically sharing their risk exposure?

A. Arbitrage.
B. Facultative.
C. Excess
D. Treaty

A nonprofit incorporated society that does not have capital stock and operates for the sole benefit of its members is known as a…

A.Fraternal benefit society.
B. a stock insurer
C. a mutual insurer.
D. the Life and Health insurance guaranty association

What year was the McCarran-Ferguson Act enacted?

A. 1945
B. 1944
C. 1946
D. 1954

What is the name of the law that required insurers to disclose information gathering practices and where the information was obtained?

A. State guaranty association
B. fair labor standards board.
C. Fair credit reporting Act.
D National Association of Insurance Commissioners

Sam purchases a $500,000 life insurance policy and pays $900 in premiums over the next six months. Sam dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

A. Aleatory.
B. adhesion.
C. Unilateral.
D. Consideration

Which of the following BEST describes a warranty?

A. Guarantees that an insurance company will pay a benefit
B. Statement believed to be true to the best of one’s knowledge
C. Cannot be used to void the contract
D. Statement guaranteed to be true

Which of these require an offer, acceptance, and consideration?

A. Warranty.
B estoppel.
C. contract.
D representation.

The part of a life insurance policy guaranteed to be true is called a(n):

A. Representation
B. exclusion
C. Warranty.
D. Waiver

Which of these is NOT a type of agent authority?

A. Express
B. Implied.
C. Principal.
D. Apparent

Which of these arrangements allows one to bypass insurable interest laws?

A. Concealment
B. Indemnity Contract.
C Contract of adhesion
D. Investor- Originated Life insurance

Stranger originated life insurance (STOLI) has been found to be in violation of which of the following contractual elements?

A. Consideration.
B. competent Parties.
C Offer/Acceptance.
D. Legal Purpose (insurable interest)

What is the consideration given by an insurer in the consideration clause of a life policy?

A. Promise to never cancel coverage.
B. Promise to pay a death benefit to a named beneficiary.
C. Promise to not raise premiums
D. Promise to accept an insured’s assignment of benefits

If a contract of adhesion contains complicated language, to whom would the interpretation favor?

A. Insurer
B. Beneficiary
C. Reinsurer.
D. Insured

The consideration clause of an insurance contract includes:

A. The buyer’s guide
B. a summary of the coverage provided
C. the named beneficiaries.
D. the schedule and amount of premium payments

Which of these is NOT considered to be an element of an insurance contract?

A. The offer.
B. acceptance.
C. negotiating
D. consideration

Insurance policies are offered on a “take it or leave it” basis, which make them:

A. Conditional Contracts.
B. Aleatory Contracts
C. Unilateral Contracts
D. Contracts of Adhesion

Statements made on an insurance application that are believed to be true to the best of the applicant’s knowledge are called:

A. Representations
B. considerations
C. warranties
D. guarantees

Taking receipt of premiums and holding them for the insurance company is an example of:

A. Commingling
B. misappropriation
C. Theft.
D. Fiduciary responsibility

A policy of adhesion can only be modified by whom?

a. The agent.
B. the applicant.
C. The primary beneficiary
D. The insurance company

A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the

A. Inherent risk.
B. Commission rate.
C inflation Factor.
D. expense charges

The life policies that have the ability to be converted to permanent coverage may do so during a specific time period. This conversion period…

A. May be altered by the policyowner.
B is controlled by the NAIC.
C. is the same in all contracts.
D. varies according to the contract

Which of the following types of Term Life policies most likely contains a Renewability feature?

A. Increasing Term.
B. 10 Year Convertible Term.
C. Decreasing Term.
D. Variable Term

A term life insurance policy matures:

A. Upon endowment of the contract.
B. upon death of the insured.
C. when the cash value equals the death benefit.
D. upon the insured’s death during the term of the policy

Under a graded premium Whole Life policy,

a. The premium increases each year during the early years of the contract and remains the same after the time
b. The premium decreases each year during the early years of the contract and remains the same after that time
c. The premium can be adjusted by the policyowner at anytime
d. The premium always remains the same while the death benefit increases during the early years

An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager?

A. Universal life insurance.
B. Key Person Insurance.
C. Graded Insurance.
D. Executive Insurance

Credit life insurance is typically issued with which of the following types of coverage?

A. Annual Renewable Term.
B. Decreasing Term.
C. Individual Whole Life.
D. Group Term

Which of these life products is NOT considered interest-sensitive?

A. Modified Whole Life.
B. Variable Universal Life.
C. Interest Sensitive Whole Life.
D. Variable Life

All of the insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:

a. Variable Life.
B. Modified Whole Life.
C. Universal Variable Life.
D. Variable Annuity

Which of the following types of permanent life insurance policies offers the highest initial cash value?

A. Single premium.
B. Limited Pay.
C. Straight Whole
D. Interest-sensitive

Sam is looking to buy a life insurance policy that will provide the greatest amount of protection for a temporary time period. Which of the following policies should he purchase?

A. Term life
B. Straight life.
C. Endowment.
D. Annuity

P is looking to purchase Renewable Term insurance. Which of these types of Term Insurance may be renewable?

A. Increasing.
B Decreasing.
C. Adjustable.
D. Level

Which of the following is considered an element of Variable Life Policy?

A. Underlying equity Investment
B. Little or no risk insured.
C. Guranteed dividends.
D. insurer assumes all the risk

Jane has a term policy that allows him to continue the coverage after expiration of the initial policy period. What type of term coverage is this?

a. Renewable.
B. increasing.
C. Level.
D. Decreasing

Joe is close to retiring and would like to. Purchase a policy that will yield great gains than bonds, but will still protect the principal with a minimum level of risk. Which product would Joe be advised to purchase?

A.Equity Index insurance
B. Endowment
C. Graded Whole life policy.
D. Return of the premium policy

Which is not a duty of the Texas Department of Insurance?

a. Regulate the business of insurance in the state of Texas
b. Appoint the Commissioner of Insurance who will serve a 4 year term
c. Protects and ensures the fair treatment of consumers
d. Ensures fair competition in the insurance industry to foster a competitive market

A limited-pay policy has:

a. Graded death benefit.
b. No cash value
c. Premium payments limited to a specified number of years
d. Premium payments that are paid to age 100

Term insurance has which of the following characteristics?

A. Expires at the end of the policy period
B. Builds cash value
C. Has nonforfeiture options
D. Endows at the end of the policy period

What kind of premium does a Whole Life Policy have?

A. Decreasing
B. Adjustable
C. Level
D. Deferred

Jane is covered by a whole life policy. Which insurance product can cover her children?

A. Assignment Provision
B. Payor benefit
C. Accelerated benefit rider
D. Child term rider

A level premium indicates:

A. The premium is fixed for a period stated in the contract, then becomes variable
B. The premium can only be changed with the consent of the insurer
C. The premium stays level until the policy’s renewal date
D. The premium is fixed for the entire duration of the contract

A policyowner is allowed to pay premiums more than once a year under which provision?

A. Insuring
B. Consideration
C. Payor
D. Mode of premium Provision

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

A. The cost
B. The nonforfeiture options
C. The contestable period
D. The assignment of ownership

___ % of personal life insurance premiums is usually deductible for federal income tax purposes.

A. 100%
B. 75%
C. 50%
D. 0%

T and 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 ina. Scuba diving accident shortly afterwards. How much of the death benefit will the mother receive?

A. $1,000,000
B. $500,000
C. $250,000
D. $0

Which statement is true regarding minor beneficiary?

A. Normally, the death proceeds are required to be held in trust until the beneficiary reaches age 21
B. Normally, a guardian is required to be appointed in the beneficiary clause of the contract
C. The minor must pay the debts of the insured’s estate before receiving any of the proceeds
D. The minor is entitled to receive the death proceeds immediately.

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

A. Premiums are normally not tax deductible
B. Cash dividends are normally not taxed
C. Entire cash surrender value is taxable
D.Proceeds are received tax-free if there is a named beneficiary

John is the policyowner for a life insurance policy with an irrevocable beneficiary designation. If John wishes to change the beneficiary, John must obtain permission from the…

A. Beneficiary
B. Payor
C. Agent
D. Commissioner of insurance

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

A. Interest only
B. Fixed period
C. Fixed amount
D. Life income

A(n) __________ beneficiary may be changed by the policyowner WITHOUT the consent of a beneficiary.

A. Revocable
B. Irrevocable
C. Tertiary
D. Replaceable

What is the underlying concept regarding level premiums?

A. Level premiums build cash value quicker in the early years
B. The premium does not change during the entire duration of the contract
C. The early years are charged less than what is needed
D. Level premiums can only be paid annually

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

A. Payer
B. Primary beneficiary
C. Policyowner
D.Insurer

Which of the following best describes a contingent beneficiary?

A. Person designated by the insured to received policy proceeds in the event that the primary beneficiary dies before the insured
B. Person designated by the primary benefit’s executor to receive policy proceeds
C. Person designated by the state to receive policy proceeds in the event that the primary beneficiary dies
D. Person designated by the insurance company to receive policy proceeds in the event that the primary beneficiary dies.

A policyowner would like to change the beneficiary on al life insurance policy and make the change permanent. Which type of designation would fulfill this need?

A. Revocable
B. Contingent
C. Irrevocable
D. Primary

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?

A. The clause provides the payment of proceeds to the insured’s estate
B. The clause provides the payment of proceeds to the beneficiary’s estate
C. The estate taxes in the insured’s estate may be reduced
D. The estate taxes in the beneficiary’s estate may be reduced

What is the purpose of a Policy Summary?

A. It details the commissions earned by the agent
B. It guarantees a policy will be issued
C. It allows the consumer to compare the costs of different policies
D.It highlights the critical parts of the policy issued

ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has:

A. Waived one of its legal rights
B. Issued a voidable policy
C. Committed an act of fraud
D. Assigned the risk to a reinsurer

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

A. When the policy is issued
B. The date of the policy delivery
C. When the conditions of the receipt are met
D. The date the sales appointment was set

Why must an insurance applicant answer all questions on a the application?

A. Statements and representations on the application are part of the consideration for issuing a policy
B. The National Association of Insurance Commissioners (NAIC) requires all questions be answered.
C. The Medical Information Bureau (MIB) requires this for an insurer to be a member
D. Statements and representations are considered guarantees

Life Insurance companies are required to establish and maintain an anti-money laundering complicate program according to which federal regulation?

A. Federal Reservation Act
B. USA Patriot Act
C. Fair Credit Reporting Act
D. Dodd-Fank Act

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

A. Mall incomplete application to applicant to be completed and returned to the agent
B. Submit the application as-is to the insurer
C. Call the applicant and complete the application over the phone
D. Set up a meeting with the application to answer the remaining questions

A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?

A. Guaranteed insurability rider
B. Aviation exclusion
C. Impairment rider
D. Accidental death benefit rider

In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and

A. A medical information report
B. The initial premium
C. Forward it immediately to the insurer
D. Attending physician statement

When an insurance application is taken by a producer, which of these statements is true?

A. The applicant should have an attorney present during the application process
B. Any changes made on the application require the applicant’s initials
C. Any changes made on the application an later be initialed by the producer if the applicant is unavailable.
D. The producer has the discretion to ask or not to ask any of the question listed on the application.

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

A. Have the the customer sign a blank application, take the application back to his office to complete prior to sending it off to the insurance company.

B. Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company

C. Complete the application and review the information with the customer prior to obtaining the customer’s signature, then send the application off to the insurance company.

D. Have the customer fill out the application and send it to his office for hin to sign, then send it off to the insurance company.

Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?

A. Geographical Location
B. Source of Income
C. Risk classification
D. Marital status

Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT:

A. Signed HIPAA disclosure
B. Signed amendment
C. Signed statement of Good Health
D. The required premium

Which of these do NOT constitute policy delivery?

A. Policy mailed to applicant
B. Policy mailed to agent
C. Policy delivered to the applicant by the agent
D. Policy issued with a rating

The USA Patriot Act was enacted in:

A. 2001
B. 2002
C. 2003
D. 2004

Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of:

A. $10,000
B. $7,500
C. $5,000
D. $2,500

Before a policy is issued, which of these contract elements is necessary?

A. A signed application by the prospect
B. A minimum amount of coverage
C. A beneficiary’s signature on an application
D. A binding receipt

T applies for a life insurance policy and is told by the producer that the insurer is bound to the coverage as of the date of the application or medical examination, whichever is later. Assuming that T is an acceptable risk, what item is given to T?

A. Binding receipt
B. Conditional receipt
C. Warranty receipt
D. Backdated receipt

On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued policy on the 15th. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?

A. Jan 8
B. Jan 14
C. Jan 15
D.Jan 26

A Medical information Report (MIB) report may disclose which of the following:

A. Prior preferred rating
B. Prior use of marijuana
C. Prior lapsing of policy
D. Prior bankruptcy judgement

Any changes made on an insurance application requires the initials of whom?

A. Insured
B. Agent
C. Applicant
D. Beneficiary

Which federal law allows an insurer to obtain an inspection report on a potential insured?

A. Medical Information Bureau Act
B. Freedom of Information Act
C. Fair Credit Reporting Act
D. Medical Information Act

T is given a receipt after completing al ife insurance application and paying the initial premium. Under this situation, T’s coverage is:

A. Guaranteed, no matter what is found during the underwriting process
B. Effective upon completing of the Free-Look period
C. Conditional, depending on the insurer’s underwriting guidelines
D. Effective upon delivery of the policy

The Insurance Commissioner of Texas DOES NOT have the power and authority to

A. Regulate the external affairs of the Department of Insurance
B. Prescribe forms and procedures to be followed in proceedings before the Department
C. Aid in the interpretation of any state insurance law
D. Enforce penalties, fines, denials, suspensions or revoctions of licensees and certificates of authority.

When an insurance application is taken by a producer, which of these statements is true?

A. The applicant should have an attorney present during the application process
B. Any changes made on the application require the applicant’s initials
C. Any changes made on the application can later be initialed by the producer if the applicant is unavailable.
D. The producer has the discretion to ask or not to ask any of the questions listed on the application.

At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?

A. After the contestable period
B. When the policy proceeds are paid
C. At the time of application
D. When the insured dies

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

A. Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company.

B. Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company.

C. Complete the application and review the information with the customer prior to obtaining the customer’s signature, the send the application off to the insurance company.

D. Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company.

A(n) ___ contained in a life insurance policy states the policy will NOT cover certain risks.

A. Elimination
B. Exclusion
C. Limitation
D. Curtailment

How long does the free look period last?

A. 10 days
B. 15 days
C. 30 days
D. 90 days

An incomplete life insurance application submitted to an insurer will result in which of these actions?

A. Application will be returned to the writing agent
B. Application will be approved with restrictions
C. Application will be pending until a MIB report is sent to the insurer
D. Application will be automatically declined

Which action is considered fraud:

A. The Insurer waiving one of its legal rights
B. An agent knowingly lying about an applicant’s age
C. The applicant misstating their address
D. An agent using a fake ID to complete an application

Which of the following is an important underwriting principle of group life insurance?

A. Physical examinations are required
B. Everyone must be covered in the group
C. Employer must pay for the entire premium
D. The group must be formed for the purpose of getting affordable insurance

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

A.Portion of the premiums paid for by the employer may be a tax deduction

B.Portion of the premiums paid for by the employee may be a tax deduction

C. Portion of the death proceeds are taxable to the beneficiary

D.Portion of the death proceeds are table to the estate

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

A.Non Eligible
B.Noncontributory
C. Eligible
D.Contributory

Company XYZ offers a group Term Life Insurance plan to its employees. What does each employee covered under this plan receive?

A.Master Policy
B.Receipt of coverage
C. Individual Policy
D.Certificate of insurance

An employee with $25,000 group term life coverage was recently fired. This employee’s group coverage may be converted to a:

A.$125,000 individual whole life policy
B.$25,000 modified whole life policy
C. $25,000 individual term life policy
D.$25,000 individual whole life policy

When an employee is terminated, which statement about a group term life conversion is true?

A.Employee must convert group term life coverage into an individual term life policy
B.Employee must provide evidence of insurability for conversion
C. Policy proceeds will be paid if the employee dies during the conversion period

D .Policy Proceeds will NOT be paid if the employee dies during the conversion period.

Group life insurance policies are generally written as:

A term rider
Annually renewable term
Increasing term
Group whole life

Which provision is NOT a requirement in a group life policy?

a Conversion
b Grace period
c Incontestable Period
d Accidental

How many employees minimum must a company have in order to offer an HMO Plan as a benefit?
A. 15
B. 25
C. 50
D. 100

True or False. A member of a group life insurance policy is the owner of the policy.

FALSE. They would receive a certificate as a member of a group insurance policy.

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n):

Installment Refund Annuity
Joint Refund annuity
Straight Refund annuity
Equal Value annuity

A 45 year-old woman won $100,000 in a scratch-off lottery ticket. She purchased an annuity that will pay her $1,500 per month beginning at age 60. Which of these annuities did this woman purchase?

Immediate Variable annuity
Immediate annuity
Deferred fixed annuity
Variable annuity

A(n) ____ annuity pays benefits based on units rather than stated dollar amounts.

Deferred
Variable
Immediate
Unit

Variable annuities may invest premiums in each of the following, EXCEPT:

Common Stock
Money Market securities
Insurer’s corporate business account
Junk bonds

Insurer’s corporate business account

T purchased a $100,000 single premium, straight life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company:

A. Does NOT have to make any further payments
B.MUST make full payments to the beneficiary
C. MUST make half-payments to the beneficiary
D. Has the option to continue making payments based on what has already been paid out

P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?

A straight life deferred annuity
A straight life annuity
An immediate annuity
A deferred annuity

S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation?

403(b) Plan
Deferred Premium
Single Premium
Period Certain

How does an indexed annuity differ from a fixed annuity?

A. Fixed annuity owners received credited interested tied to the fluctuations of the linked index
B. Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index
C. Fixed annuity owners have a separate investment account
D. Indexed annuity owners receive annual dividends

What type of annuity has a cash value that is based upon the performance of its underlying investment funds?

Deferred
Flexible
Variable
Fixed

Which of these is NOT a source of funding for Social Security benefits?

Self employed individuals
Employees
Federal Government
Employers

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

A. Primary Insurance Amount (PIA)
B. Total taxes paid into FICA
C. Number of dependents
D. State of residence

Which of the following does Social Security NOT provide benefits for?

A. Survivorship
B. Dismemberment
C. Disability
D.Retirement

All of these are considered to be a benefit under Social Security, EXCEPT for:

Survivorship
B. Unemployment
C. Disability
D. Retirement

What is Old Age and Survivors Health Insurance (OASDHI) also known as?

A. Medicare
B. Social Security
C. Medicaid
D.FICA

An employer that offers a qualified retirement plan to its employees is eligible to:

A. Avoid ERISA regulations
B. Make tax-deductible contributions to the plan
C. Make tax deductible contributions to key employees only
D.Make partial tax-deductible contributions to the plan

All of the following statements about traditional individual retirement accounts are false EXCEPT

A. 10% penalty is applied to withdrawals after age 59 ½
B. Withdrawals are normally tax-free to the recipient
C. 10% penalty is applied to withdrawals before age 59 ½
D.Contributions are not tax deductible

A sole proprietor may use this plan ONLY if the employees of this business are included.

SEP Plan
B. Keogh Pension Plan
C. Individual Retirement account (IRA)
D. Individual Retirement Account IRA E.SIMPLE Plan

In an individual retirement account (IRA), rollover contributions are:

A. Subject to capital gains tax
B. Subject to ordinary income tax
C. Partially limited by dollar amount
D.Not limited by dollar amount

A 55 year old recently received a $30,000 distribution from a previous employer’s 401K plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

Only income taxes on $30,000
B. Only income taxes on $24,000
C. Income taxes plus a 10% penalty tax on $30,000
D.Income taxes plus a 10% penalty tax on $24,000

Tom has a qualified plan with his employer that is currently considered to be 80% “vested.” How can this be interpreted?

A. 20% of the funds are subject to taxes
B. 80% of the funds are invested in a sperate account
C. If Tom’s employment is terminated, 20% of the funds would be forfeited
D. If Tom’s employment is terminated, 80% of the funds would be forfeited

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the:

A. Marital deduction
B. Death benefits
C. Section 1035 exchange
D. Capital gains tax rate

Which tax would an IRA participant be subjected to on distributions received prior to age 59 ½?

10% tax penalty for early withdrawal
Capital gains tax
Ordinary income tax and a 10% tax penalty for early withdrawal
Ordinary income tax

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?

25
50
100
250

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

Surrender charge is applied

The account can be rolled into the surviving spouse’s IRA

Distributions will be received tax-free if surviving spouse is over age 59 ½

Future distribution are payable to the owners estate

Which of these factors does NOT Influence an applicant’s need for life insurance?

A. Lifestyle of the applicant
B. Number of dependents
C. Future educational costs of the dependents
D. Self-maintenance expenses

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?

A. 12
B. 6
C. 3
D. 1

Which statement regarding third-party ownership of a life insurance policy is true?

A. Beneficiary is required to be irrevocable
B. Policy cannot be assigned once issued
C. It is illegal is most states
D. It is used extensively in estate-planning as well as business circumstances

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 the beneficiary?

A. Split-dollar plan
B. Employer purchase plan
C. Key employee plan
D. Deferred compensation plan

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is:

Business Overhead Expenses
Disability Income
Key Employee Life
Contributory