Chapter 7 Other Life Classes and Information Review Questions
The maximum amount of deduction allowed for a married couple who both work when contributing to an IRA is: A. $5,000 annually B. $8,000 annually C. $4,000 annually D. $10,000 annually
Answer: $11,000???
If premiums are paid partly by the employees and partly by the employer, it is called contributory and the required participation among eligible members is: A. 50% B. 75% C. 100% D. There is no required percentage
Answer: B
A disabled person covered under group insurance may continue coverage for a period of ______________, by continuing to pay the portion of premium, if any, that would have been required of the insured had total disability not occurred. A. 3 months B. 6 months C. 9 months D. 12 months
Answer: B
All of the following are characteristics of the conversion feature except: A. The amount to be converted is limited B. The type of policy converted to may only be term coverage C. The company must pay a claim for the amount that could have been converted if death occurs during the conversion period D. Proof of insurability cannot be required to convert
Answer: B
All of the following are characteristics of group life insurance except: A. Coverage of at least 10 people under one Master contract B. Coverage is generally available without regard to individual insurability C. Individual policies are issued to each covered member D. Lack of choice by individuals as to benefit levels
Answer: C
All of the following are benefits available under Social Security except: A. Medicare B. Retirement C. Disability D. Medicaid
Answer: D
All of the following factors affect rates charged for group life except: A. The claim history of the group or similar groups B. The actual ages of the group members C. The ratio of males and females to the total number of persons insured D. The portion of the premium to be paid by the employer
Answer: D
Of the following statements, which is false about Key employee insurance? A. The key employee is the insured B. The employer is the owner, payor and beneficiary of the policy C. There may be a change of insured provision in the policy D. The policy must be permanent insurance, not term
Answer: D
Of the following, which would be a false statement regarding a noncontributory group life plan? A. It requires 100% employee participation B. The employer pays 100% of the premiums C. They help reduce adverse selection against the insurer D. The employees receive individual policies
Answer: D
Credit life insurance is usually written as: A. Level term B. Increasing term C. Decreasing term D. Endowment
Answer: C
If a person covered under a group life policy ceases to be covered because of termination of employment or of membership in the class or classes eligible for coverage, that person shall be entitled to convert to an individual plan offered by the insurer without proving insurability if done so within __________ days. A. 15 B. 30 C. 31 D. None of the above
Answer: C
If the premium is non-contributory, that is paid entirely by the employer, the required participation is: A. 50% B. 75% C. 100% D. There is no required coverage
Answer: C
Tax Sheltered Annuities are available to qualified individuals such as: A. Corporate Executives B. Bank Presidents C. Public School teachers D. All of the above
Answer: C
When receiving benefits from an annuity, the following tax consequences generally apply: A. No taxes are due since it is considered a retirement plan B. The entire amount received is considered to be taxable C. Only the amount received which is considered a "gain" would be taxable D. Only the amount originally paid on the annuity is taxable
Answer: C
Adams Floor Restoration provides group term life insurance to it's employees. What is the maximum amount of coverage they can provide without creating any tax liability for the employees? A. Unlimited B. $10,000 C. $25,000 D. $50,000
Answer: D
Life insurance purchased to cover the payment of small loans, installment purchases, or other obligations in case of death is usually referred to as: A. Franchise insurance B. Blanket insurance C. Credit life insurance D. All of the above
Answer: C
Which of the following statements regarding the tax consequences of life insurance is correct? A. The premiums paid by an employer on group term insurance for employees may be tax deductible for the business B. Premiums paid on individual term life policies are tax deductible C. Dividends paid by mutual companies to policy holders would be considered taxable income to the policy holder D. Beneficiaries are never required to pay taxes on proceeds o a life policy
Answer: A
All of the following are tax-deferred retirement plans, EXCEPT: A. IRA B. Key employee policies C. KEOGH plans D. SEP
Answer: B
Mike surrenders his life insurance policy for the cash value after paying $500 per year for 20 years. He receives a check from the company in the amount of $14,750 which represents the cash value at the time of cancellation. How much will Mike be required to pay income tax on? A. Zero B. $10,000 C. $4,750 D. $14,750
Answer: C
The type of life insurance usually issued in group insurance is: A. Whole life B. Endowment C. One year renewable term D. Industrial
Answer: C
There is a provision found in group insurance that allows the insurance company to pay a certain amount of benefits to a person appearing to be entitled to it by reason of paying last expenses of the insured. The maximum amount payable under this provision is: A. $500 B. $1,000 C. $10,000 D. $3,000
Answer: C
Jack is eligible for all benefits available under Social Security. His worker status with Social Security is: A. Fully insured B. Currently insured C. Completely insured D. Totally insured
Answer: A
The parties to a group contract will be the insurer and: A. The employer or master policy holder B. The individual group members C. The beneficiary D. All of the above
Answer: A