With permanent insurance, the policy owner can borrow against the cash value in
ID: 2727729 • Letter: W
Question
With permanent insurance, the policy owner can borrow against the cash value in the form of interest bearing loans or as surrender proceeds.
True
False
Dylan purchased a $250,000 term insurance policy on his own life, and then transferred the policy to his wife Nora two months later. The couple’s daughter Morgan is the beneficiary of the policy. At Dylan’s death, the death benefit payable to Morgan is considered a gift from Nora, subject to gift tax.
True
False
Which type of life insurance policy permits the contract owner to choose the level of premium, the death benefit amount and the duration of the premium-paying period?
Convertible term
Whole life
Universal life
Second-to-die life
Convertible term
Whole life
Universal life
Second-to-die life
Explanation / Answer
Correct options are
1. True
2. False
3. Whole life
1.
With permanent insurance, the policy owner can borrow against the cash value in the form of interest bearing loans or as surrender proceeds.
True
2. Dylan purchased a $250,000 term insurance policy on his own life, and then transferred the policy to his wife Nora two months later. The couple’s daughter Morgan is the beneficiary of the policy. At Dylan’s death, the death benefit payable to Morgan is considered a gift from Nora, subject to gift tax.
False
3. Which type of life insurance policy permits the contract owner to choose the level of premium, the death benefit amount and the duration of the premium-paying period?
Whole life
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