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Benefits Intermediate: Whole Life Insurance

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1.
Mutual insurance company dividends are taxable.
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False. Mutual insurance company dividends are a tax-free return of premium.
2.
In a whole life insurance policy, cash value refers to _______.
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The amount of the policy you will get if you surrender your policy before you die. As opposed to face value, which is what your dependents will get, cash value is what you will get if you should cancel your policy early.
3.
In a split-dollar arrangement, the _______ owns the life insurance policy.
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Employer. In a split-dollar arrangement, the employer owns the life insurance policy.
4.
In a whole life insurance policy, part of the premium you pay _______.
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Both covers the death benefit and is invested. Your premium goes toward both of these.
5.
The cost of life insurance is based on which of the following factors?
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All of the above. The price of life insurance takes all of these factors into account.