Life Insurance EXAM Q's

Annuities are taxed on an exclusion ratio in which the portion of annual payment that is principal is tax-free and the portion that is interest is: Select one: a. Taxed as income b. Taxed partially c. Tax deferred d. Tax-free

taxed as income

Which of the following fixed annuities has a minimum rate of return and a current rate of return that is connected to the S&P 500? Select one: a. Market value adjusted annuity b. Equity indexed annuity c. Fixed annuity d. FPDA

Equity Indexed

What annuity is characterized by flexible premium payment amounts and frequency, and an annuity period that begins 20 years after the annuity purchase date? Select one: a. SPDA b. FPDA c. SPIA d. Immediate or deferred annuity

FPDA

Steven currently earns $50,000 annually. He has calculated that he should have approximately $1,500,000 in life insurance to be sure his family is guaranteed the lifestyle he would provide if he dies. This approach is called: Select one: a. Human Life Value b. Future Income Planning c. Needs analysis d. Capital accumulation

Human Life Value

Which of the following statements is not true about a retirement income annuity? Select one: a. It is an ordinary immediate annuity. b. It has a decreasing term life insurance rider. c. If the annuitant dies before retirement, it pays a death benefit and the value of the annuity. d. The beneficiary can choose the settlement option.

a

Universal life policies allow the policyowner to: Select one: a. Take out a policy loan b. Withdraw cash c. Both of the above d. None of the above

c - maybe

Which of the following is not true of the straight life income option for annuities? Select one: a. Payments consist of principal and interest. b. Payments stop upon the annuitant's death. c. The straight life income option provides the largest periodic benefit. d. A beneficiary will receive any balance of the annuity upon the annuitant's death.

d

The annual renewable term (ART): Select one: a. Has a level face amount and level premium amount b. Has an increasing face amount and increasing premium amount c. Has a requirement for proof of insurability at renewal and a maximum age d. Has no requirement for proof of insurability at renewal and a maximum age.

has no requirement

A settlement option that would leave the proceeds of the insurance policy with the insurer and the insurer would pay interest to the beneficiary on an installment basis is known as a: Select one: a. Withdrawal provision b. Fixed period option c. Life income option d. Interest only option

interest only