For the Insurance to Be Valid, the Required Insurable Interest

question 8

Multiple Choice

For the insurance to be valid, the required insurable interest in life insurance contracts must exist:

• A) before the loss occurs.
• B) at the time the loss occurs.
• C) at the time the policy was issued.
• D) throughout the term of the policy.

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Definitions:

Variable Direct Labor Cost

Costs associated with labor that vary directly with the level of production output.

Fixed Factory Overhead Cost

Costs related to the operation of a manufacturing facility that do not vary with production volume, such as rent, salaries, and insurance.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Target Cost Approach

A pricing method where the selling price is set first, and then the target cost is determined by subtracting a desired profit margin.