FIN 428 Week 3 Quiz | eBooks | Education

FIN 428 Week 3 Quiz

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FIN 428 Week 3 Quiz

https://zh.scribd.com/document/343514565/Uop-Tutorial

FIN 428 Week 3 Quiz

 

 

 

 

    • Correct answerquestion1

 

 

 

?Group life insurance premiums paid by an employer are deductible by the employer and nontaxable to the employee

?when included as a part of a pension plan.

?up to 10% of the employee’s salary.

?for up to $50,000 in group permanent life insurance.

?for up to $50,000 in term life insurance.

 

 

 

    • Correct answerquestion2

 

 

 

?Mr. Jones dies leaving a $100,000 life insurance policy to his wife. The wife elects to take the $100,000 over a ten year period and receives $11,130 per year.  What part of this payment is taxable as income to the wife?

?Only the $100,000, which may be spread over the ten year period during which it is received

?$11,130 per year

?$1,130 per year

?None of it

 

 

 

    • Correct answerquestion3

 

 

 

?The least impressive feature cited in support of life insurance as an investment is

?the compulsion it entails.

?the favorable tax treatment.

?you don’t have to die to collect.

?the safety of principal.

 

 

 

    • Correct answerquestion4

 

 

 

?The normal length of the suicide exclusion in life insurance policies is

?one month from the date of issue.

?six months from the date of issue.

?five years from date of issue.

?two years from date of issue.

 

 

 

    • Correct answerquestion5

 

 

 

?The three primary elements in life insurance ratemaking are

?mortality, expenses, and profits.

?costs, profits and taxes.

?mortality, loading, and expenses.

?interest, mortality, and loading.

 

 

 

    • Correct answerquestion6

 

 

 

?The specific requirements regarding evidence of insurability imposed on the insured under the reinstatement clause are

?intended to avoid a loss of investment income.

?required by the changing investment income over time.

?necessary to prevent adverse selection.

?designed to offset the cost of reissuing the policy.

 

 

 

    • Correct answerquestion7

 

 

 

?The cash value in a whole life insurance policy

?increases until it meets the face of the contract at the end of the policy period.

?lowers because the premium paid in the early years is less than the cost of protection.

?is similar in value as compared to a term insurance policy.

?raises or lowers depending on its fair market value at the end of the policy period.

 

 

 

    • Correct answerquestion8

 

 

 

?Life insurance contracts receive favorable tax treatment in that

?in computing taxable gain, the insured may deduct all premiums paid, including the element that paid for protection.

?the investment earnings on the cash value of insurance policies are not considered a taxable gain.

?although proceeds to a beneficiary are usually taxable as income, it is at a reduced rate.

?the investment earnings on the cash value are only taxed during the period of accumulation.

 

 

 

    • Correct answerquestion9

 

 

 

The rate of return on the investment element in cash value life insurance policies?

?is guaranteed in the policy to always be a positive return.

?varies widely among life insurance companies.

?is typically the same among life insurance companies.

?is readily apparent and relatively easy for the layperson to compute.

 

 

 

    • Correct answerquestion10

 

 

 

?Mr. Jones purchased a $50,000 whole life policy with double indemnity on May 1, 2000.  On May 25, 2002, he committed suicide.  The insurer will be required to pay

?only the premiums which Jones has paid to the company.

?$50,000.

?the company will not be required to pay anything.

?$100,000.

 

 

 

    • Correct answerquestion11

 

 

 

The factor that has had the greatest influence on the growth of employee benefits has been ?

?employer efforts to improve employee morale.

?the favorable tax treatment.

?the fact that coverage is on a group basis and is therefore less expensive.

?union negotiation for benefits.

FIN 428 Week 3 Quiz https://zh.scribd.com/document/343514565/Uop-Tutorial FIN 428 Week 3 Quiz Correct answerquestion1 ?Group life insurance premiums paid by an employer are deductible by the employer and nontaxable to
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