Life Insurance Basics
An estate consists largely of a family business and will face costs at death. How does life insurance serve estate conservation?
Answer and explanation
Answer: C. Estate conservation uses the death benefit to provide cash for taxes, debts, and settlement costs so illiquid assets need not be sold at a poor time. The policy does not remove the business from the estate, postpone obligations, or make the business itself liquid.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, estate conservation
More life insurance basics questions
- Which three factors determine a life insurance premium?
- Which three factors determine the premium an insurer charges for a life policy?
- Who bears the investment risk in a variable life policy?
- Who owns, pays for, and benefits from key person life insurance?
- Whose interests may a producer weigh when making a recommendation under Regulation 187?
- Why can the human life value approach and the needs approach produce different amounts for the same client?
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