Life Insurance Basics
A parent buys life insurance so the family can keep the house if he dies. Which personal use is that?
Answer and explanation
Answer: A. Survivor protection replaces the income the family would lose at the insured's death, which is what keeps the household running. Estate conservation addresses taxes and costs at death, cash accumulation is the build-up inside a permanent policy, and liquidity is the availability of cash when it is needed.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, survivor protection
More life insurance basics questions
- A variable whole life owner reallocates policy value among available stock and bond choices. Which account description should the producer use?
- A young professional with modest savings buys a large policy. Which personal use does that serve?
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- An advertisement describes a life policy chiefly as a savings and investment plan. Why is that a problem?
- An applicant applies without paying any premium. The insurer issues the policy exactly as requested. When is the contract formed?
- An applicant believes the personal information an insurer holds is inaccurate. What recourse is provided?
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