Life Insurance Basics
An estate consists chiefly of illiquid farmland facing settlement costs. Why is life insurance suited to conserving it?
Answer and explanation
Answer: D. Insurance delivers cash exactly when the estate needs it, so the farmland need not be sold at a forced price. Proceeds are not automatically outside the gross estate, and settlement costs are not deferred to a future sale.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, estate conservation
More life insurance basics questions
- What does a policyowner receive under a participating policy that a nonparticipating policy does not provide?
- What does liquidity mean in the context of a permanent life policy?
- What does the human life value approach measure?
- What gives a permanent policy its cash accumulation feature?
- What is a participating life insurance policy?
- What is an attending physician statement used for in underwriting?
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