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RMI 3011 Exam 3 RMI 3011 Florida State University -Question and answers correctly solved
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RMI 3011 Exam 3 RMI 3011 Florida State University -Question and answers correctly solved Chapter 10 Managing the Risk of Loss of Life - correct answer Understand the various exposures to premature death - correct answer Premature death-death prior to planned retirement age. Various exposur...

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  • November 30, 2024
  • 7
  • 2024/2025
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  • rmi 3011 exam 3
  • rmi 3011 exam 3 question and answers correctly sol
  • rmi 3011 exam 3 rmi 3011 florida state university

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RMI 3011 Exam 3 Question and answers
correctly solved
Chapter 10 Managing the Risk of Loss of Life - correct answer ✔


Understand the various exposures to premature death - correct answer
✔Premature death-death prior to planned retirement age. Various exposures
include timing, wealth, income, and dependents. Executor funds and Human
life value


Distinguish among the insurer, the beneficiary, the insured, and the policy
owner of a life insurance policy - correct answer ✔Face amount- pays a
specific amount of money. Beneficiary- to a person or organization. The
insured- when a person named on a policy dies.


Term Life Insurance - correct answer ✔Term Insurance- designed to provide
protection if the insured dies during a specific period of time, policy has a set
end date, no coverage after, no savings component. Least expensive
premium per dollar of coverage.


Whole Life Insurance - correct answer ✔Designed to provide protection for
the entire life of the insured, no set end date, savings component (Builds up
cash value), premiums are set by the insurer, more expensive than term
insurance. Straight life, Limited Pay Life, and Single Premium Life


Variable Life Insurance - correct answer ✔Version of Whole life where the
death benefit and cash value fluctuate with investment performance.
Designed to provide protection for the entire life of the insured. No set end
date. Has savings component (builds up cash value). Gets some choice in
investments. Fixed Premiums.

, Universal Life Insurance - correct answer ✔Provides protection for entire life,
no set end date, savings component (builds up cash value), choice in
premiums paid but not investment choices.. Type A death benefit is a
specified amount that remains the same while the policy is in place. Type B
death benefit fluctuates, payment uopn death is the policy's cash value.


Variable Universal Life - correct answer ✔Flexible premiums, Investment
options, level or increasing death benefits, MOST FLEXIBLE.


Explain how life insurance premiums, death benefits, and cash values are
treated for federal income tax purposes - correct answer ✔Premium
payments are not a tax deductible expense. Death benefits are usually not
taxable to beneficiary if paid as a lump sum. Cash values paid when
whole/universal life contracts are terminated may be taxable.


Explain the intent of key life insurance contract provisions. - correct answer
✔Suicide Clause: Insurer can only deny claims for suicide during an initial
period (2 years). War Hazard Exclusion: during periods of war, insurers may
exclude death due to war or other hostile action. Aviation Hazard Exclusion:
death from aviation activities other than fare paying passenger on a
commercial aircraft


Give examples of important considerations in wording the beneficiary
designation in a life insurance policy - correct answer ✔Beneficiaries must
have insurable interest at the time the policy is issued. Most beneficiaries are
revokable- they can be changed at any time at the policyholder's discretion.
Irreversible beneficiaries cannot be changed without the beneficiaries written
consent. Contingent beneficiaries may be named in case the primary
beneficiary is not alive at the time of the insureds death. Common disaster
clause: upon the insureds death, the insurance proceeds are held by the
insurer for a short period of time, then issued to living beneficiaries.

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