A contract of life insurance is mcq
Life insurance is a contract which guarantees a specific promised sum of money to a designated beneficiary upon the death of the insured, or the insurance if he survives the term of the policy. Life being the most important asset of an individual, Life Insurance enjoys the maximum scope. “Life insurance contract is a contract whereby a person (insurer) agrees for a consideration (that is payment of a sum of money) or a periodical payment, called the premium to pay to another (insured or his estates) a stated sum of money on If, during any taxable year of the policyholder, a contract which is a life insurance contract under the applicable law ceases to meet the definition of life insurance contract under subsection (a), the income on the contract for all prior taxable years shall be treated as received An agent who sells an individual life insurance policy in MUST deliver to the policy owner a) An Underwriting Report Disclosure b) A Prospectus and Ledger Statement c) A Policy Summary and Buyer's Guide d) An Annual Financial Statement of the insurer Answer: c) A Policy Summary and Buyer's Guide The life insurance contract is capital asset property. However, Rev. Rul. 64-51 explicitly states that the proceeds received from the surrender of, or at the maturity of, a life insurance contract are ordinary income to the extent that they exceed the cost of the policy. There are two type of life insurance. a) Term Life Insurance : Term life Insurance is a type of life Insurance, which provides coverage for fixed rate of premium for a limited period of time. Term Insurance can cover you for the term of one or two years. b) Permanent Life Insurance: Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest.
Q1, ______ contracts are based on the principle of indemnity. [ 3 Marks ] Q3, Life insurance is one of components of financial planning [ 1 Mark ] (a) FALSE
As life insurance plans are considered to be legal contracts, the terms that are found within these contracts will essentially outline the limitations of the particular events that are insured. With this in mind, policies will also typically include specific conditions under which coverage is specifically excluded. “A contract that pledges payment of an agreed upon amount to the person (or his/her nominee) on the happening of an event covered against” is technically known as 1) Death coverage 2) Life insurance Not all insurance contracts are indemnity contracts. Life insurance contracts and most personal accident insurance contracts are non-indemnity contracts. You may purchase a life insurance policy of $1 million, but that does not imply that your life's value is equal to this dollar amount. It is the amount of liability covered for an individual by insurance services. Living and death benefits are listed in life insurance. It is the amount on a life insurance policy that is payable to the beneficiary when the recipient passes away. It is also known as “survivor benefitâ€.
Understand insurance procedures for life insurance claims. 4. 12. Understand how relevant Method of assessment: 50 multiple choice questions (MCQs). 1 hour is allowed for this 3.1 Describe the essentials of a valid contract of insurance.
This chapter covers the agency law and other important legal topics for life and health insurance agents in order to prepare you for the Life and Health Insurance License Exam. Included are sample questions pertaining to this topic to help you prepare. (B) An insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a large risk. As life insurance plans are considered to be legal contracts, the terms that are found within these contracts will essentially outline the limitations of the particular events that are insured. With this in mind, policies will also typically include specific conditions under which coverage is specifically excluded. “A contract that pledges payment of an agreed upon amount to the person (or his/her nominee) on the happening of an event covered against” is technically known as 1) Death coverage 2) Life insurance
If, during any taxable year of the policyholder, a contract which is a life insurance contract under the applicable law ceases to meet the definition of life insurance contract under subsection (a), the income on the contract for all prior taxable years shall be treated as received
a) life insurance policies are contracts of indemnity. b) Indemnity is determined by the insurer. c) The principle of indemnity demands that an insured should neither lose nor gain as a result of a loss. d) To indemnify means to put someone back in the same financial position as he was when the policy was purchased. This chapter covers the agency law and other important legal topics for life and health insurance agents in order to prepare you for the Life and Health Insurance License Exam. Included are sample questions pertaining to this topic to help you prepare. (B) An insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a large risk. As life insurance plans are considered to be legal contracts, the terms that are found within these contracts will essentially outline the limitations of the particular events that are insured. With this in mind, policies will also typically include specific conditions under which coverage is specifically excluded.
a) life insurance policies are contracts of indemnity. b) Indemnity is determined by the insurer. c) The principle of indemnity demands that an insured should neither lose nor gain as a result of a loss. d) To indemnify means to put someone back in the same financial position as he was when the policy was purchased.
This chapter covers the agency law and other important legal topics for life and health insurance agents in order to prepare you for the Life and Health Insurance License Exam. Included are sample questions pertaining to this topic to help you prepare. (B) An insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a large risk. As life insurance plans are considered to be legal contracts, the terms that are found within these contracts will essentially outline the limitations of the particular events that are insured. With this in mind, policies will also typically include specific conditions under which coverage is specifically excluded. “A contract that pledges payment of an agreed upon amount to the person (or his/her nominee) on the happening of an event covered against” is technically known as 1) Death coverage 2) Life insurance
(B) An insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a large risk. As life insurance plans are considered to be legal contracts, the terms that are found within these contracts will essentially outline the limitations of the particular events that are insured. With this in mind, policies will also typically include specific conditions under which coverage is specifically excluded. “A contract that pledges payment of an agreed upon amount to the person (or his/her nominee) on the happening of an event covered against” is technically known as 1) Death coverage 2) Life insurance