Arkansas Life and Health Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Arkansas Life and Health Insurance Exam. Utilize flashcards and multiple-choice questions with hints and explanations for each question. Get thoroughly ready for your certification test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

A married couple wants to have funds available so that the heirs to their estate have the funds necessary to pay the estate taxes. Which of the following would be the most economical and effective way to accomplish this?

Annuities
Buy a Joint Survivorship Life policy
Individual Term Life policies for each spouse
Variable Life Insurance policy

The correct answer is: Annuities

Annuities would be the most economical and effective way for a married couple to have funds available to ensure their heirs can pay the estate taxes. Annuities provide a guaranteed income stream over a specified period or for life, depending on the type of annuity chosen. In this case, the annuity payments can be used to cover any estate taxes that may be due upon the death of the insured individuals. Buying a Joint Survivorship Life policy, individual Term Life policies for each spouse, or a Variable Life Insurance policy might provide a death benefit to cover the estate taxes, but they may not be as cost-effective or efficient as annuities in providing a guaranteed income stream specifically for this purpose.