Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?

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Two equal partners in a business worth $150,000 are using a Cross Purchase plan to protect against the death of each other. Which of the following statements would be correct?

a. partner B buys a policy on partner A in the amount of $75,000 naming Partner A as beneficiary.
b. partner A buys a policy on partner B in the amount of $150,000 naming Partner A as beneficiary.
c. partner B buys a policy on partner A in the amount of $150,000 naming Partner A as beneficiary.
d. partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.

Answer: d. partner A buys a policy on partner B in the amount of $75,000 naming Partner A as beneficiary.

Life Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

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In an insurance contract, the applicant's "consideration" is the
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The voluntary relinquishment of a legal right is called
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