Gita has owned a whole life non-participating policy on her own life for the past 11 years.
Question:
Gita has owned a whole life non-participating policy on her own life for the past 11 years. It is payable to her estate and was purchased to pay final expenses. The policy has a $50,000 face amount, annual premiums of $750 and a cash surrender value (CSV) of $2,800. In addition to the death benefit the policy has waiver of premium and a guaranteed insurability option. Gita recently started up her own business, a theatre arts company for teens and younger children. The business is just getting going and Gita is short of cash as a result. She wants to retain her coverage and all benefits and riders, but isn't certain that she'll be able to pay the premiums for the next year or two. What non-forfeiture option would you recommend for Gita to consider?
A) Automatic Premium Loan (APL)
B) Extended Term
C) Reduced Paid-Up (RPU)
D) Cash Surrender Value (CSV)
South-Western Federal Taxation 2018 Comprehensive
ISBN: 9781337386005
41st Edition
Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young