In case of life insurance policies with profits, policy holders are given the right to participate in the profits of the business and for this purpose insurance company will pay: a. Claims to policy holders b. Bonus to policy holders c. Consideration to policy holders d. Annuity to policy holders
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- When should a company report the cost of an insurancepolicy as an expense?a. When the company first signs the policy.b. When the company pays for the policy.c. When the company receives the benefits from thepolicy over its period of coverage.d. When the company receives payments from the insurance company for its insurance claims.The company selling the insurance policy is the _________________. a. Insurer b. Policy c. Premium d. InsuredWhat does the insurer agree to pay for in addition to covering losses in an insurance policy? Services such as investigating claims and defending the insured The entire policy limit Premium costs for the policy period Only losses below the deductible
- X Co. can deduct life insurance premiums paid providing: O the life insurance policy is required as security on a loan from a financial institution O the company paid the life insurance policy within the year O the premium paid is for insurance on the president of X Co O the premium paid is reasonable in terms of costA. Which of the following is TRUE regarding a whole life insurance policy that pays a dividend? When the dividend is paid, it is taxed to the policyholder as an ordinary dividend The dividend is automatically credited against future premiums The dividend is paid directly to the beneficiary on the policy When the dividend is paid, it can be used to purchase additional coverage B. Each employee covered under a group life policy MUST be given: An individual certificate of insurance A certificate of insurance for each family member covered An insurance identification card for each family member covered A copy of the group master contract C. Universal life products are flexible premium policies that are: Interest sensitive Guaranteed issue Non-renewable Term only D. Which of the following statements is CORRECT about life insurance proceeds paid to a named beneficiary? They are exempt from claims by the insurance creditors They are subject to excise taxes…Life insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Required: True or False
- The policy holder who receives the coverage is called ________________. a. Premium b. Face value c. Insured d. InsurerThe contract between insured and insurer is ______________. a. Coverage b. Premium c. Policy d. Face valueThe consideration paid by insured in a contract of insurance. A. premium C. prepaid insurance B. insurance expense D. either B or C
- Entity A obtains life insurance for its key employee from Entity B (an insurance company). Entity B cedes the insurance contract with Entity A to Entity C, another insurance company. How should Entity B account for the insurance contract with Entity C?A. using the modified version of the general model applicable for onerous insurance contractsB. using the general modelC. using a modified version of (a) or (b) applicable to reinsurance contracts heldD. using the premium allocation approachInsurance producers who must maintain Premium Fund Trust Accounts (PFTAS) may withdraw funds from the account to pay all of the following expenses EXCEPT: premiums due insurers A. B. C. D. claim payments due insureds return premiums due insureds commissions due other licensees PWhich of the following items is required by the Life Insurance and Annuity Replacement Rule? A. A Notice Regarding Replacement of Life Insurance or Annuity B.A Notice Regarding Insurance Producer Compensation Schedule C.A Statement of Ethical Practices D. A Comparative Information form