Which Of The Following Is Not A Reason For A Business To Buy Key Person Life Insurance?

Which of these is NOT a reason for a business to buy key person life insurance? The correct answer is “A pension deficiency if the key employee dies“.

For which of the following reasons do businesses often purchase life insurance?

Employers will frequently purchase life insurance on a key employee to help offset the cost of finding and training a replacement in the event of the key employee’s premature death.

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Which of the following is a use of key person life insurance?

Under a key person life insurance policy, the business owns the policy, pays the premiums and is the beneficiary. If a key person dies, the business then collects a death benefit. That money can be used to help a business replace lost revenue as they search for a replacement.

What is the purpose of key person insurance quizlet?

The purpose of key person insurance is to mitigate the loss to the business due to the death of a key employee.

When an individual is planning to protect his family with life insurance One method of doing so is called needs analysis what exactly does needs analysis involve?

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? Identifies the needs of an individual and the individual’s dependents.

What is one reason that a teenager might consider buying life insurance?

Medical and funeral expenses are conventional reasons to purchase life insurance for teenagers. An unexpected loss, independent of age, can be a financial burden. The average funeral costs around $8,000-$10,000. And that doesn’t factor in any medical costs that accrue before a loved one passes away.

Why should you purchase insurance quizlet?

Why do people purchase insurance? They get insurance so they can be protected if something bad happens. The insurance company will pay some of the financial cost. a set amount the insurer must pay before the insurance company pays.

Which of the following is not an example of a business use of life insurance?

Which of the following is NOT an example of a business use of Life Insurance? Workers Compensation is a benefit payable when a worker is injured by a work-related injury, regardless of fault or negligence. It is not considered a business use of insurance.

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Which of the following is key person?

In a small business, the key person is usually the owner, the founders, or perhaps a key employee or two. The main qualifying point is whether the person’s absence would cause major financial harm to the company. If this is the case, key person insurance is definitely worth considering.

What type of life insurance are normally used for key employee indemnification?

The types of life insurance generally used to cover key employee indemnification are term, whole, and universal life insurance. Universal life is subject to a contract interest rate or a current annual interest rate.

What is the purpose of a key person insurance?

Key person insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away, according to the Insurance Information Institute (III).

Why would a business use a key person life insurance policy quizlet?

Under a key person plan, the business applies for, owns, and is the beneficiary of the policy covering the life of a key employee. Coverage compensates the employer for the loss of a key employee when he or she dies. The insurer will pay the $1,000,000 death benefit from the deceased owner’s policy to ABC Corporation.

What is the purpose of the Buyers Guide quizlet?

What is the purpose of the buyers guide? To allow the consumer to compre the costs of different policies. If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about: Whether an insurable interest exist between the individuals.

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Which of these is not a reason for a business to buy key person life insurance quizlet?

Which of these is NOT a reason for a business to buy key person life insurance? The correct answer is ” A pension deficiency if the key employee dies “.

When a misrepresentation on a life insurance policy application is discovered what action may an insurance company take?

The two-year period during which the insurer has the right to contest the insurance contract is called the “contestability period.” If, after the investigation, they find significant inaccuracies, referred to as “material misrepresentations”, they have the right to deny paying the life insurance claim.

Which of the following life insurance policies combine term insurance with an investment element?

Universal life (UL) insurance is a form of permanent life insurance with an investment savings element plus low premiums. The price tag on universal life (UL) insurance is the minimum amount of a premium payment required to keep the policy. Beneficiaries only receive the death benefit.

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