4 – Life Insurance Premiums, Proceeds and Beneficiaries

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If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured’s contingent beneficiary

When can a policyowner change a revocable beneficiary?


Which premium schedule results in the lowest cost to the policyowner?


A level premium indicates

the premium is fixed for the entire duration of the contract

J chooses a monthly premium payment mode on his Whole Life insurance policy. Which of these statements is correct?

The gross premium is higher on a monthly payment mode as compared to being paid annually

C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most?

The cost

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?

Proceeds will be paid to P’s estate

On a life insurance policy, who is qualified to change the beneficiary designation?


How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

If the primary beneficiary dies before the insured

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?


P and Q are married and have three children. P is the primary beneficiary on Q’s Accidental Death and Dismemberment (AD&D) policy and Q’s sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to

P only

A policyowner is able to choose the frequency of premium payments through what policy feature?

Premium Mode

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

What kind of life insurance beneficiary requires his/her consent when a change of beneficiary is made?

Irrevocable beneficiary

What is the underlying concept regarding level premiums?

The early years are charged more than what is needed

An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Proceeds will go to the contingent beneficiary

A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?


A policyowner is allowed to pay premiums more than once a year under which provision?

Mode of Premium

K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?


J would like to maintain the right to change beneficiaries. Which beneficiary designation should be used?


M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?


Which statement regarding the Change of Beneficiary provision is true?

The policyowner can change the beneficiary

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

Entire cash surrender value is taxable

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


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