Life Insurance Policies
Who receives the proceeds of a credit life policy when the borrower dies?
Answer and explanation
Answer: C. The creditor is the beneficiary up to the amount still owed, and any excess is payable to the borrower's estate or named beneficiary. The debt is discharged directly rather than through the estate.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, credit life beneficiary
More life insurance policies questions
- Is a single premium whole life policy issued without underwriting?
- Two business partners purchase a joint life policy to fund a buy-sell agreement. Partner A dies. What happens to the policy after the death benefit is paid?
- Two business partners want the survivor to be able to buy out the deceased partner's interest. Which design serves that?
- Under IRC § 7702 corridor rules, what must an insurer do if cash value growth in a universal life policy threatens to breach the statutory life insurance definition ratio?
- What administrative role does a group plan sponsor typically undertake?
- What are the usual purposes of buying a modest policy on the life of a minor?
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