Which of the Following Statements Is True About a Guaranteed

question 30

Multiple Choice

Which of the following statements is true about a guaranteed renewable long-term care policy?

• A) benefits are taxable.
• B) premiums are never tax deductible.
• C) the policy is non-cancellable.
• D) premiums cannot be increased by the insurer unless they are increased for the entire rating class.
• E) premiums cannot increase for any reason.

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Definitions:

Fixed Costs

Expenses that do not vary with production level or sales volume, such as rent, salaries, and insurance premiums.

Rent

Payment made by a tenant to a landlord for the use of a property.

Depreciation

The allocation of the cost of an asset over its useful life.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability that excludes interest and income tax expenses.