Life Insurance Exam Questions WI With Complete
Solutions
A 60-year-old participant in a 401(k) plan takes a distribution
and rolls it over to an IRA within 60 days. Which of the
following is true?
a) The amount of the distribution is reduced by the amount of a
20% withholding tax
b) No taxes are due since the plan participant is over age 59 1/2
c) There is a 10% early withdrawal penalty
d) The amount distributed is subject to ordinary income tax
Correct Answers a
A claimant, whi is totally and permanently disabled, is eligible
for Social Security Disability benefits after an elimination period
of
a) 24 months
b) 0 months
c) 5 months
d) 12 months Correct Answers c
A corporation is the owner and beneficiary of the key person life
policy. If the corporation collects the policy benefit, then
a) IRS has no jurisdiction
b) the benefit is received as taxable income
c) the benefit is received tax-free
d) the benefit is subject to the exclusionary rule Correct Answers
c
,A couple owns a life insurance policy with a Children's Term
rider. Their daughter is reaching the maximum age of dependent
coverage, so she will have to convert to permanent insurance in
the near future. Which of the following will she need to provide
for proof of insurability?
a) proof of insurability is not required
b) medical exam
c) her parents' federal income tax receipts
d) medical exam and parents' medical history Correct Answers
a
A long stretch of national economic hardship causes a 7% rate
of inflation. A policyowner notices that the face value of her life
insurance policy has been raised 7% as a result. Which policy
rider caused this change?
a) inflation rider
b) cost of living rider
c) value adjustment rider
d) return of premium rider Correct Answers b
A married couple owns a permanent policy which covers both of
their lives and pays the death benefit only upon the death of the
insured. Which policy is that?
a) second-to-die
b) family income policy
c) joint life policy
d) survivorship life policy Correct Answers c
,A policy may be issued for a term longer than one year or for an
indefinite term as long as there is a clause in the policy
providing for cancellation by giving how much notice prior to
the anniversary date? Correct Answers 60 days
A policyowner who is also the insured wants to name her
husband as the beneficiary of her life policy. She also wishes to
retain all of the rights of ownership. The policyowner should
have her husband named as the
a) Revocable beneficiary
b) Secondary beneficiary
c) Contingent beneficiary
d) Irrevocable beneficiary Correct Answers a
A producer is helping a married couple determine the financial
needs of their children in the event one or both should die
prematurely. This is a personal use of life insurance known as
a) survivor protection
b) life planning
c) survivorship protection
d) juvenile protection provision Correct Answers a
A prospective insured receives a conditional receipt but dies
before the policy is issued. The insurer will
a) pay the policy proceeds up to an established unit
b) not pay the policy proceeds under any circumstances
c) automatically pay the policy proceeds
, d) pay the policy proceeds only if it would have issued the
policy Correct Answers d
A provision in a life or health insurance policy that may assist an
insurance company in determining the cause of death of an
insured is called
a) attending physician's report
b) medical exam
c) autopsy
d) inspection Correct Answers c
According to the entire contract provision, a policy must contain
a) a declarations page with a summary of insureds
b) Buyer's guide to life insurance
c) listing of the insured's former insurer(s) for incontestability
provisions
d) a copy of the original application for insurance Correct
Answers d
All of the following are beneficiary designations EXCEPT
a) Contingent
b) primary
c) specified
d) tertiary Correct Answers c
All of the following are characteristics of group life insurance
EXCEPT
Solutions
A 60-year-old participant in a 401(k) plan takes a distribution
and rolls it over to an IRA within 60 days. Which of the
following is true?
a) The amount of the distribution is reduced by the amount of a
20% withholding tax
b) No taxes are due since the plan participant is over age 59 1/2
c) There is a 10% early withdrawal penalty
d) The amount distributed is subject to ordinary income tax
Correct Answers a
A claimant, whi is totally and permanently disabled, is eligible
for Social Security Disability benefits after an elimination period
of
a) 24 months
b) 0 months
c) 5 months
d) 12 months Correct Answers c
A corporation is the owner and beneficiary of the key person life
policy. If the corporation collects the policy benefit, then
a) IRS has no jurisdiction
b) the benefit is received as taxable income
c) the benefit is received tax-free
d) the benefit is subject to the exclusionary rule Correct Answers
c
,A couple owns a life insurance policy with a Children's Term
rider. Their daughter is reaching the maximum age of dependent
coverage, so she will have to convert to permanent insurance in
the near future. Which of the following will she need to provide
for proof of insurability?
a) proof of insurability is not required
b) medical exam
c) her parents' federal income tax receipts
d) medical exam and parents' medical history Correct Answers
a
A long stretch of national economic hardship causes a 7% rate
of inflation. A policyowner notices that the face value of her life
insurance policy has been raised 7% as a result. Which policy
rider caused this change?
a) inflation rider
b) cost of living rider
c) value adjustment rider
d) return of premium rider Correct Answers b
A married couple owns a permanent policy which covers both of
their lives and pays the death benefit only upon the death of the
insured. Which policy is that?
a) second-to-die
b) family income policy
c) joint life policy
d) survivorship life policy Correct Answers c
,A policy may be issued for a term longer than one year or for an
indefinite term as long as there is a clause in the policy
providing for cancellation by giving how much notice prior to
the anniversary date? Correct Answers 60 days
A policyowner who is also the insured wants to name her
husband as the beneficiary of her life policy. She also wishes to
retain all of the rights of ownership. The policyowner should
have her husband named as the
a) Revocable beneficiary
b) Secondary beneficiary
c) Contingent beneficiary
d) Irrevocable beneficiary Correct Answers a
A producer is helping a married couple determine the financial
needs of their children in the event one or both should die
prematurely. This is a personal use of life insurance known as
a) survivor protection
b) life planning
c) survivorship protection
d) juvenile protection provision Correct Answers a
A prospective insured receives a conditional receipt but dies
before the policy is issued. The insurer will
a) pay the policy proceeds up to an established unit
b) not pay the policy proceeds under any circumstances
c) automatically pay the policy proceeds
, d) pay the policy proceeds only if it would have issued the
policy Correct Answers d
A provision in a life or health insurance policy that may assist an
insurance company in determining the cause of death of an
insured is called
a) attending physician's report
b) medical exam
c) autopsy
d) inspection Correct Answers c
According to the entire contract provision, a policy must contain
a) a declarations page with a summary of insureds
b) Buyer's guide to life insurance
c) listing of the insured's former insurer(s) for incontestability
provisions
d) a copy of the original application for insurance Correct
Answers d
All of the following are beneficiary designations EXCEPT
a) Contingent
b) primary
c) specified
d) tertiary Correct Answers c
All of the following are characteristics of group life insurance
EXCEPT
