Life Insurance Final Exam Questions and
Answers () (Verified Answers)
A person who is in good health and does not drink nor smoke is considered
a preferred risk
Upon death of an annuitant during the accumulation period of a deferred annuity, the proceeds:
Are taxable to the beneficiary above the annuitants cost basis
Life insurance sold to fund a small partnership buy/sell agreement is also called
Cross purchase plan
Although excluded in the contract, a court may direct the insurer to pay a claim under the doctrine of:
Reasonable expectations
What insurance product has a flexible premium, fixed rate of return, tax deferred growth and a death
benefit equal to the cash value
Flexible premium deferred annuity
A 30 year old client invests $20000 in a deferred annuity, which grows to $50000 in 20 years. at age
50, the annuitant takes a partial withdrawal in the amount of $10000. How is this taxed?
100% ordinary income plus 10% penalty
All of the following are true about group life insurance except:
Proceeds paid to the beneficiary are taxable
A life insurance benefit payable while the insured is still living is
accelerated benefits
All of the following are guaranteed on a participating whole life insurance policy, except
The dividend scale
A preferred risk has a
Longer than average life expectancy
On most qualified retirement plans, such as traditional IRAs, distributions must begin no later than
age 70 1/2 If they dont, as excise tax of _____ applies:
50%
On a refund annuity, who is entitled to the refund:
the beneficiary
Most people buy deferred annuities to
earn tax deferred income to supplement retirement
, a collateral assignment on a life insurance policy:
Is a partial assignment of some rights to a creditor
when the initial premium is paid along with the application for life insurance, he agent or producer
should give the applicant a:
conditional receipt
Producers should be very concerned about possible errors and omissions when:
replacing life insurance
Parents of children ages six and eight are considering IRA's for them. What would you advise them:
To consider alternative investments, since IRAs are only for those with earning s and their spouses.
Which life insurance settlement option takes into account the life span of the beneficiary:
Life income option
All of the following are false about single premium whole life insurance except:
They have an immediate cash value
All of the following are true about employer group life, except:
Conversion is based upon original age
Distributions taken from a tax-sheltered annuity (TSA) are:
Taxable as ordinary income in the year of the distribution.
Which of the following is true when life insurance is used by an employer as an executive bonus plan:
The employer pays the premium
buying insurance does all of the following except:
eliminates the risk
All of the following are false about insurable interest on life insurance, Except:
It must exist at the time of the application
All of the following are true about the fair credit reporting act, except:
It requires applicants to sue in order to get inaccurate data corrected.
On a tax deferred annuity, distributions must begin by age:
No age limit applies
All are true about joint life policies, except:
They pay when the last party dies
Answers () (Verified Answers)
A person who is in good health and does not drink nor smoke is considered
a preferred risk
Upon death of an annuitant during the accumulation period of a deferred annuity, the proceeds:
Are taxable to the beneficiary above the annuitants cost basis
Life insurance sold to fund a small partnership buy/sell agreement is also called
Cross purchase plan
Although excluded in the contract, a court may direct the insurer to pay a claim under the doctrine of:
Reasonable expectations
What insurance product has a flexible premium, fixed rate of return, tax deferred growth and a death
benefit equal to the cash value
Flexible premium deferred annuity
A 30 year old client invests $20000 in a deferred annuity, which grows to $50000 in 20 years. at age
50, the annuitant takes a partial withdrawal in the amount of $10000. How is this taxed?
100% ordinary income plus 10% penalty
All of the following are true about group life insurance except:
Proceeds paid to the beneficiary are taxable
A life insurance benefit payable while the insured is still living is
accelerated benefits
All of the following are guaranteed on a participating whole life insurance policy, except
The dividend scale
A preferred risk has a
Longer than average life expectancy
On most qualified retirement plans, such as traditional IRAs, distributions must begin no later than
age 70 1/2 If they dont, as excise tax of _____ applies:
50%
On a refund annuity, who is entitled to the refund:
the beneficiary
Most people buy deferred annuities to
earn tax deferred income to supplement retirement
, a collateral assignment on a life insurance policy:
Is a partial assignment of some rights to a creditor
when the initial premium is paid along with the application for life insurance, he agent or producer
should give the applicant a:
conditional receipt
Producers should be very concerned about possible errors and omissions when:
replacing life insurance
Parents of children ages six and eight are considering IRA's for them. What would you advise them:
To consider alternative investments, since IRAs are only for those with earning s and their spouses.
Which life insurance settlement option takes into account the life span of the beneficiary:
Life income option
All of the following are false about single premium whole life insurance except:
They have an immediate cash value
All of the following are true about employer group life, except:
Conversion is based upon original age
Distributions taken from a tax-sheltered annuity (TSA) are:
Taxable as ordinary income in the year of the distribution.
Which of the following is true when life insurance is used by an employer as an executive bonus plan:
The employer pays the premium
buying insurance does all of the following except:
eliminates the risk
All of the following are false about insurable interest on life insurance, Except:
It must exist at the time of the application
All of the following are true about the fair credit reporting act, except:
It requires applicants to sue in order to get inaccurate data corrected.
On a tax deferred annuity, distributions must begin by age:
No age limit applies
All are true about joint life policies, except:
They pay when the last party dies
