Life insurance premiums proceeds and beneficiaries

All proceeds are income tax free in the year they are received

Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?

Life Income

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Policyowner

Who has the right to change a revocable beneficiary?

Irrevocable beneficiary

Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner?

Life settlement contract

A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

The early years are charged more than what is needed

What is the underlying concept regarding level premiums?

The policyowner can change the beneficiary

Which statement regarding the Change of Beneficiary provision is true?

Proceeds will be payable to K's estate if P dies within a specified time

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Entire cash surrender value is taxable

Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?

0%

____ of personal life insurance premiums is usually deductible for federal income tax purposes.

Irrevocable

A policyowner's rights are limited under which beneficiary designation?

interest to the insurer is decreased while the administrative costs are increased

Quarterly premium payments increase the annual cost of insurance because