Chapter 4: Type of Insurance Policies Part 1 (Exam I) 2024/2025 passed

Chapter 4: Type of Insurance Policies Part 1 (Exam I)Decreasing term life insurance is often used to A) provide retirement funds B) provide coverage for a home mortgage C) accumulate cash value D) provide coverage for estate taxes - correct answer B) provide coverage for a home mortgage Under a Modified Endowment Contract, what are the likely tax consequences? A) Interest on policy loans is tax deductible B) Premium payments are tax deductible C) Pre-death distributions will become taxable D) Cash value cannot be surrendered early - correct answer C) Pre-death distributions will become taxable What is the proper order of initial life insurance premiums, from lowest to highest? A) Ordinary life, single premium, modified premium B) Modified premium, ordinary life, single premium C) Single premium, modified premium, ordinary life D) Ordinary life, modified premium, single premium - correct answer B) Modified premium, ordinary life, single premium Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive?