Jeanne Wants to Purchase a Life Insurance Policy with Guaranteed

question 3

Multiple Choice

Jeanne wants to purchase a life insurance policy with guaranteed premiums. What kind of policy would she want to purchase?

• A) Dividend policy
• B) Nonparticipating policy
• C) Mutual policy
• D) Participating policy
• E) Stock policy

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Definitions:

Marginal Tax Rate

This represents the percentage of tax applied to an individual's or corporation's last dollar of income, indicating the tax impact on incremental income.

Net Income

After accounting for all costs and paying taxes, the remaining revenue that constitutes a company's profit.

Marginal Tax Rates

The rate at which your last dollar of income is taxed, representing the percentage of tax applied to your income for each tax bracket in which you qualify.

Eligible Dividends

Dividends designated by a corporation to be eligible for a reduced tax rate in the hands of individual Canadian shareholders.