Which of the following is an example of liquidity in a life insurance contract?Asked by: Kenton Hartmann | Last update: February 11, 2022
Score: 4.9/5 (39 votes)
Which of the following is an example of liquidity in a life insurance contract? The cash value available to the policyowner. Liquidity in life insurance refers to availability of cash to the insured. Some life insurance policies offer cash values that can be borrowed at any time and used for immediate needs.
What is an example of liquidity in a life insurance contract?
Liquidity in life insurance refers to how easily you can get cash from your life insurance policy. Life insurance policies with a cash value component, like whole life insurance, have liquidity because you can easily withdraw from them or surrender the policies for money.
What is liquidity in a life insurance policy?
With respect to life insurance, liquidity refers to how easily you can access cash from the policy. The concept applies mostly to permanent life insurance, because it accumulates cash value over time.
What does the secondary addressee provision protect?
Who does the secondary addressee provision protect? The insured over the age of 64 The secondary notice/addressee provision protects elderly insured.
Which of the following best defines the owner as it pertains to life settlement contracts quizlet?
Which of the following best defines the "owner" as it pertains to life settlemetn contracts? The policy owner of the insurance policy. ... An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit secure the loan.
What is liquidity?
Which of the following best defines the owner in a life settlement contract?
Which of the following best defines the owner of a life settlement contract? The term "owner" refers to the owner of the policy who may seek to enter into a life settlement contract.
Which of the following is an example of third-party ownership?
Key person, or key employee, life insurance is an example of third-party ownership. *Upon the insured employee's death, the surviving family receives the policy's death benefit.
Which of the following is an example of a limited pay life policy?
Life paid up at Age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the period that is limited, not the maturity.
Which of the following are examples of third party ownership of a life insurance policy except?
All of the following are examples of a third-party ownership EXCEPT: S applies for a policy on herself and names her husband as the beneficiary. Third-party ownership exists when the insured and the owner of the policy are different persons. A business owner buys a life policy on his own life.
Which of the following types of insurance policies is most commonly used in credit life insurance?
Credit life insurance and credit disability insurance are the most commonly offered forms of coverage. They also may go by different names. For example, a credit life insurance policy might be called "credit card payment protection insurance," "mortgage protection insurance" or "auto loan protection insurance."
How does insurance provide liquidity?
The relationship between insurance and macro-economic liquidity is threefold: first, insurance contributes to ensuring liquidity by pooling the risks it covers; second, it enhances liquidity by reducing the cost of financial intermediation; and third, insurance can be the source of a liquidity crisis and systemic risk, ...
Is a life insurance policy a liquid asset?
Liquid assets are assets that can be converted quickly and easily to cash without losing value. ... Other liquid assets include life insurance policies that have a cash surrender value, savings bonds, stocks, and certificates of deposit without withdrawal penalties.
What's the most liquid asset?
Cash on hand is considered the most liquid type of liquid asset since it is cash itself. Cash is legal tender that an individual or company can use to make payments on liability obligations.
What is the term liquidity?
Liquidity is a company's ability to raise cash when it needs it. There are two major determinants of a company's liquidity position. The first is its ability to convert assets to cash to pay its current liabilities (short-term liquidity).
Which type of insurance provides liquidity at the time of death?
Life insurance is one the few ways to provide liquidity at the time of death.
What type of asset is a life insurance policy?
Cash value life insurance is considered a liquid asset because you can withdraw funds from your policy while you're alive.
Who is a third party owner?
Third party insurance is where the owner of the policy and the insured are two different entities. It involves the policy owner, the insured and the beneficiary.
Who are the parties in a third party life insurance ownership situation?
The three parties involved in third-party ownership are the policyowner, the insured, and the insurer. The beneficiary is not a party to the contract.
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.
What is a limited term life insurance policy?
Limited pay life insurance is a type of whole life insurance that allows you to prepay for the entire cost of your coverage for a set number of years. ... You may pay for your premiums monthly, quarterly, semi-annually, or annually if you select to do so in a restricted time period—typically 10, 15, or 20 years.
What is a 20 pay life?
What is a 20 year term life policy? A 20 year term life insurance policy allows the insured to lock in a level premium rate and guaranteed death benefit for 20 years. This makes it an attractive term length for a wide range of people from young to more mature.
How does a limited pay life policy differ from a whole life policy?
With a limited payment whole life policy, you pay for the entire life insurance policy during the first years only. A whole life policy generally requires premium payments for your entire life unless you opt to use the cash value to pay for premiums at some point.
Which of the following is an example of a third party?
An example of a third party would be the escrow company in a real estate transaction; the escrow party acts as a neutral agent by collecting the documents and money that the buyer and seller exchange when completing the transaction. A collection agency may be another example of a third party.
Who is the third party of Tata AIG health insurance?
At Tata AIG, we do not have any Third-Party Administrators for our health insurance plans. We handle the entire process of our health insurance portfolio in-house, ranging from application for health insurance policies to claim settlement and extending customer support.
What is key employee life insurance policy the third party owner can be all of the following except?
Needs analysis is a method of life insurance planning which identifies the needs of an individual and the individual's dependents. In a Key Employee life insurance policy, the third-party owner can be all of these EXCEPT the insured.