NWM Chapter 6 Exam Questions with Verified Answers Latest Version 2025 Graded A+

NWM Chapter 6 Exam Questions with Verified Answers Latest Version 2025 Graded A+ Which statement best describes a single premium whole life policy? - Answers Paid-up policy that offers lifetime protection What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? - Answers Trust administration fees would reduce policy proceeds Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured? - Answers Insured's estate When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this? - Answers Irrevocable beneficiary The beneficiary of a life insurance policy is normally selected by whom? - Answers Policyowner What kind of arrangement gives the policyowner the right to change the beneficiary? - Answers Revocable designation Life insurance premiums are computed on what three factors? - Answers Mortality, interest, expenses What effect does interest income have upon insurance premiums? - Answers Decreases premium Which of these occurrences could improve an insurer's ability to reduce premiums? - Answers Rate of earnings on investments increase Death benefits from a life insurance policy are normally considered to be - Answers exempt from federal income tax Which life insurance settlement option pays lifetime benefits to two or more people? - Answers Joint and survivor Who is the beneficiary in a life insurance policy? - Answers The stated person or entity who is designated to receive the death proceeds A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan? - Answers Face amount minus the loan balance and past-due premium Which statement is INCORRECT about the interest-only settlement option in a life insurance policy? - Answers Interest on proceeds must be paid by the beneficiary When there is a named beneficiary on a life insurance policy, the death benefits - Answers are paid directly to the beneficiary without interference from the insured's creditors A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes? - Answers Nothing Which statement regarding a fixed period settlement option is correct? - Answers The installment payment amount is determined by the total number of installments A life insurance policy's contingent beneficiary is the - Answers person who receives the deat