Kentucky Life Insurance State Exam Practice
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1. The premiums paid by an employer for his employee's group life insurance
are usually considered to be: Tax-deductible to the employer
2. Which of these is NOT considered to be a cost connected with an individual's
death?: Business expenses
3. These are all accurate statements regarding universal life insurance EXCEPT-
: Policy loans are not permitted
4. Which of these is NOT relevant when determining the amount of personal life
insurance needed?: Local unemployment rate
5. Who elects the governing body of a mutual insurance company?: Policyholders
6. Why would evidence of insurability be required for a person insured with a
variable universal life policy?: The face amount is increased
7. At what point are death proceeds paid in a joint life policy?: When the first insured
dies
8. What is considered a valid reason for small businesses to insure the lives of
its major shareholders?: Fund a buy-sell agreement
9. Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)?: Policy loans
10. Dividends from a mutual insurance company are paid to whom?: Policyowners
11. Traditional individual retirement annuity (IRA) distributions must start by: Apri
1st of the year following the year the participant attains age 70 1/2
12. How are Roth IRA distributions normally taxed?: Distributions are received tax-free
13. How can an insurance company minimize exposure to loss?: Reinsurance
14. All of the following statements about traditional individual retirement ac-
counts are false EXCEPT: 10% penalty is applied to withdrawals before age 59 1/2
15. All of these statements concerning universal life insurance are false EXCEPT-
: Policy indicates how much of the premium is used toward company expenses
16. A 55 year old recently received a $30,000 distribution from a previous em-
ployer's 401k plan, minus $10,000 withholding. Which federal taxes apply if
none of the funds were rolled over?: Income taxes plus a 10% penalty tax on $30,000
17. For insurance purposes, similar objects which are exposed to the same perils
are referred to as: Homogeneous exposure units
1/7
, Kentucky Life Insurance State Exam Practice
Study online at https://quizlet.com/_207b9g
18. In an individual retirement account (IRA), rollover contributions are: Not limited
by dollar amount
19. What is the maximum number of employees (earning at least $5,000) that
an employer can have in order to start a SIMPLE retirement plan?: 100
20. Which statement concerning a decreasing term life policy is accurate?: Face
amount decreases over time
21. All of these are considered features of whole life insurance EXCEPT: Initial
premium is lower than for an equivalent amount of term insurance
22. An employer that offers a qualified retirement plan to its employees is
eligible to: Make tax-deductible contributions to the plan
23. The insurance coverage in a variable life insurance policy may fluctuate
based on the value of: Its underlying investments
24. How long is a person covered for under a limited pay whole life policy?: Until
age 100
25. When does an insured stop making payments under a thirty-payment whole
life policy?: When the insured dies or 30 years from the policy's inception, whichever comes first
26. What does a fixed life annuity offer protection against?: Savings depletion because of
longevity
27. When does interest income in a deferred annuity get reported for federal
income taxes?: When the distributions are received
28. Which statement regarding the cash value of a whole life insurance policy is
correct?: Payable to the policy owner when policy has been surrendered
29. The following are all elements of a legal contract EXCEPT: Recorded evidence
30. An insurance policy that can also be classified as a securities product is
called: Variable life
31. Which of these do NOT indicate the presence of insurable interest in a life
insurance contract?: Lifelong friendship
32. The owner of a single premium deferred annuity is entitled to do all of these
EXCEPT: Make multiple premium payments
33. An insurance company's voluntary refusal to enforce a contract's provision
is called a(n): Waiver
2/7
Study online at https://quizlet.com/_207b9g
1. The premiums paid by an employer for his employee's group life insurance
are usually considered to be: Tax-deductible to the employer
2. Which of these is NOT considered to be a cost connected with an individual's
death?: Business expenses
3. These are all accurate statements regarding universal life insurance EXCEPT-
: Policy loans are not permitted
4. Which of these is NOT relevant when determining the amount of personal life
insurance needed?: Local unemployment rate
5. Who elects the governing body of a mutual insurance company?: Policyholders
6. Why would evidence of insurability be required for a person insured with a
variable universal life policy?: The face amount is increased
7. At what point are death proceeds paid in a joint life policy?: When the first insured
dies
8. What is considered a valid reason for small businesses to insure the lives of
its major shareholders?: Fund a buy-sell agreement
9. Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)?: Policy loans
10. Dividends from a mutual insurance company are paid to whom?: Policyowners
11. Traditional individual retirement annuity (IRA) distributions must start by: Apri
1st of the year following the year the participant attains age 70 1/2
12. How are Roth IRA distributions normally taxed?: Distributions are received tax-free
13. How can an insurance company minimize exposure to loss?: Reinsurance
14. All of the following statements about traditional individual retirement ac-
counts are false EXCEPT: 10% penalty is applied to withdrawals before age 59 1/2
15. All of these statements concerning universal life insurance are false EXCEPT-
: Policy indicates how much of the premium is used toward company expenses
16. A 55 year old recently received a $30,000 distribution from a previous em-
ployer's 401k plan, minus $10,000 withholding. Which federal taxes apply if
none of the funds were rolled over?: Income taxes plus a 10% penalty tax on $30,000
17. For insurance purposes, similar objects which are exposed to the same perils
are referred to as: Homogeneous exposure units
1/7
, Kentucky Life Insurance State Exam Practice
Study online at https://quizlet.com/_207b9g
18. In an individual retirement account (IRA), rollover contributions are: Not limited
by dollar amount
19. What is the maximum number of employees (earning at least $5,000) that
an employer can have in order to start a SIMPLE retirement plan?: 100
20. Which statement concerning a decreasing term life policy is accurate?: Face
amount decreases over time
21. All of these are considered features of whole life insurance EXCEPT: Initial
premium is lower than for an equivalent amount of term insurance
22. An employer that offers a qualified retirement plan to its employees is
eligible to: Make tax-deductible contributions to the plan
23. The insurance coverage in a variable life insurance policy may fluctuate
based on the value of: Its underlying investments
24. How long is a person covered for under a limited pay whole life policy?: Until
age 100
25. When does an insured stop making payments under a thirty-payment whole
life policy?: When the insured dies or 30 years from the policy's inception, whichever comes first
26. What does a fixed life annuity offer protection against?: Savings depletion because of
longevity
27. When does interest income in a deferred annuity get reported for federal
income taxes?: When the distributions are received
28. Which statement regarding the cash value of a whole life insurance policy is
correct?: Payable to the policy owner when policy has been surrendered
29. The following are all elements of a legal contract EXCEPT: Recorded evidence
30. An insurance policy that can also be classified as a securities product is
called: Variable life
31. Which of these do NOT indicate the presence of insurable interest in a life
insurance contract?: Lifelong friendship
32. The owner of a single premium deferred annuity is entitled to do all of these
EXCEPT: Make multiple premium payments
33. An insurance company's voluntary refusal to enforce a contract's provision
is called a(n): Waiver
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