Life Insurance Exam-Illinois 150
Questions With 100% Correct
Answers 2024 Passed.
Pooling of Risks - ANSWER >>>A large group of people contribute money
to a fund out of which their losses can be paid
Policyowner - ANSWER >>>is the person or org that applies for the policy
and pays the premium
Actuarial Tables - ANSWER >>>Are statistical tables that are used when
calculating premium rates and mortality loss reserves
Life Insurance Policies transfer: - ANSWER >>>financial risks of
premature death on a defined amount
Loss of income - ANSWER >>>the face amount of life insurance is
determined as a multiple of income
Life annuity - ANSWER >>>contract which is issued by a life insurance
company protects an individual against the financial risk of outliving a
normal life expectancy according to the mortality actuarial tables and
running out of money in old age
Life annuity - ANSWER >>>guarantees monthly income benefits to the
annuitant for the rest of his/her life no matter how long he/she lives
Insurable interest - ANSWER >>>a person must be in a position where
he/she will lose money should loss occur only at the time the policy is
issued
Who must have insurable interest? - ANSWER >>>the policy owner;
he/she will lose money should hte insured die prematurely
tax qualified plans - ANSWER >>>contributions can be deducted
, non qualified plans - ANSWER >>>contributions cannot be deducted
tax deferred plans - ANSWER >>>tax on the interest and/or earnings is
postponed as it compounds and accumulates until it is withdrawn
tax free - ANSWER >>>no tax on benefits
cost basis - ANSWER >>>total contributions made to the plan
Tax: premiums paid on individual life insurance policies... - ANSWER
>>>cannot be deducted (non-qualified)
Tax: the benefits paid to the beneficiary at the insured's death... -
ANSWER >>>is usually not taxed (tax free)
Participating policy - ANSWER >>>pays a dividend
Tax: dividends paid to the policyowner on participating policies... -
ANSWER >>>are usually not taxed (tax free)
Modified Endowment Contract - ANSWER >>>The IRS has written rules
that define when a life insurance policy does not have a real, valid life
insurance purpose and is in substance an investment or savings plan
If a cash value life insurance policy does not have a valid life insurance
purpose, the IRS classifies it as a - ANSWER >>>modified endowment
contract
Underwriter - ANSWER >>>is an insurance company employee who
reviews applications and additional information and decides whether the
applicant is acceptable and what the correct premium rate should be
Application includes (7 items) - ANSWER >>>age, sex, occupation,
dangerous recreational activities, aviation, smoking, agent's report
Medical reports can be (3 items) - ANSWER >>>health questionare,
paramedic examiner's report, and physician's report
Questions With 100% Correct
Answers 2024 Passed.
Pooling of Risks - ANSWER >>>A large group of people contribute money
to a fund out of which their losses can be paid
Policyowner - ANSWER >>>is the person or org that applies for the policy
and pays the premium
Actuarial Tables - ANSWER >>>Are statistical tables that are used when
calculating premium rates and mortality loss reserves
Life Insurance Policies transfer: - ANSWER >>>financial risks of
premature death on a defined amount
Loss of income - ANSWER >>>the face amount of life insurance is
determined as a multiple of income
Life annuity - ANSWER >>>contract which is issued by a life insurance
company protects an individual against the financial risk of outliving a
normal life expectancy according to the mortality actuarial tables and
running out of money in old age
Life annuity - ANSWER >>>guarantees monthly income benefits to the
annuitant for the rest of his/her life no matter how long he/she lives
Insurable interest - ANSWER >>>a person must be in a position where
he/she will lose money should loss occur only at the time the policy is
issued
Who must have insurable interest? - ANSWER >>>the policy owner;
he/she will lose money should hte insured die prematurely
tax qualified plans - ANSWER >>>contributions can be deducted
, non qualified plans - ANSWER >>>contributions cannot be deducted
tax deferred plans - ANSWER >>>tax on the interest and/or earnings is
postponed as it compounds and accumulates until it is withdrawn
tax free - ANSWER >>>no tax on benefits
cost basis - ANSWER >>>total contributions made to the plan
Tax: premiums paid on individual life insurance policies... - ANSWER
>>>cannot be deducted (non-qualified)
Tax: the benefits paid to the beneficiary at the insured's death... -
ANSWER >>>is usually not taxed (tax free)
Participating policy - ANSWER >>>pays a dividend
Tax: dividends paid to the policyowner on participating policies... -
ANSWER >>>are usually not taxed (tax free)
Modified Endowment Contract - ANSWER >>>The IRS has written rules
that define when a life insurance policy does not have a real, valid life
insurance purpose and is in substance an investment or savings plan
If a cash value life insurance policy does not have a valid life insurance
purpose, the IRS classifies it as a - ANSWER >>>modified endowment
contract
Underwriter - ANSWER >>>is an insurance company employee who
reviews applications and additional information and decides whether the
applicant is acceptable and what the correct premium rate should be
Application includes (7 items) - ANSWER >>>age, sex, occupation,
dangerous recreational activities, aviation, smoking, agent's report
Medical reports can be (3 items) - ANSWER >>>health questionare,
paramedic examiner's report, and physician's report
