Question 1. 1. (TCO D) Larry purchased a whole life policy with a face value of

Question

Question 1.1. (TCO D) Larry purchased a whole life policy with a face value of $1,000,000 and dies several years later. At the time of his death, Larry has paid a total of $12,000 in premiums, has accumulated $25,000 in cash value, has received a total of $5,000 in policy dividends, and has a $10,000 policy loan outstanding. If Larry's beneficiaries elect to receive a lump-sum distribution of death benefits, how much will it be? (Points : 4) A) $1,025,000
B) $1,015,000
C)$1,000,000
D)$990,000
E)Some other amount Question 2.2. (TCO D) Marilyn Simms died with a $200,000 life insurance policy. Her husband, Jack, was the primary beneficiary and their children, Mimi (age 24) and Ann (age 30), were the contingent beneficiaries. All three survived Marilyn. How would the policy proceeds be distributed? (Points : 4) A)$200,000 to Jack
B)$100,000 each to Mimi and Ann
C)$100,000 to Jack and $50,000 each to Mimi and Ann
D)$66,666 each to Jack, Mimi, and Ann
E) $150,000 to Jack and $25,000 each to Mimi and Ann

Explanation / Answer

1- answer is D

face value = 1000000

value of loan = 10000

lump sum amount = 1000000 - 10000 = 990000

2- Answer is A

$200,000 to Jack because her husband is a primary beneficiary and children are contingent beneficiary

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