Variable Test

which of the following is correct regarding taxation of funds that accumulate in an IRA Funds accumulate tax deferred when interest accumulates the principal balance is taxed in proportion to the interest that is earned variable state taxes apply a 10% federal tax is imposed

Funds accumulate tax deferred

what kind of penalty will be imposed on a qualified distributions paid out before 59.5 50% semi annual based on current interest rate yearly 10%

10%

policy loan requests except for those for payment of due premium may be deferred for a period of up to 30 days 6 months 9 months 90 days

6 months

a life insurance policy qualified as a MEC if the amount of premiums paid exceeds the amount that would have provided paid-up insurance in how many years 5 3 7 the life of the policy

7 years

which of the following is known as the paper act? Securities exchange act of 1934 Securities act of 1933 fair credit reporting act trust indenture act

Securities act of 1933

a loan request for payment of due premiums on the policy, how soon must insurer issue a loan immediately within 90 days within 10 days within 30 days

immediately

who would be allowed to catch up contributions into an IRA plan? anyone who has a traditional IRA an IRA owner who contributes less than the allowed max amount individuals 50 or older individuals who have dependents

individuals 50 or older

variable life insurance separate accounts must be registered under the investment company act of 1940 SECURE act of 2019 securities act of 1933 maloney act of 1938

investment company act of 1940

which of the following would not be classified as an investment company under the investment company act of 1940 management investment companies face amount certificate companies unit investment trusts investment depository institutions

investment depository institutions

an agreement that is enforceable by law is known as what kind of contract? conditional legal unilateral adhesion

legal

contributions to Roth IRAs are tax deductible paid with pre tax dollars not tax deductible always subject to 6% tax penalty

not tax deductible

An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive $30,000 $70,000 $100,000 survivor benefit determined by the insurance company

$70,000

which of the following policy loan interest rates is a set percentage per year? prime rate variable rate fixed rate compound rate

fixed rate

where are premiums from fixed annuities invested separate account variable annuity general account hedge fund

general account

during the accumulation phase of a fixed annuity the annuitants interest rate is based on the min rate as specified in the contract or the current interest rate, whichever is higher lower specified in annuity contract more beneficial to the insurer

higher

Which of the following is true regarding pure life annuity settlement option? Beneficiary will receive a refund of the principal it guarantees that all proceeds will be paid out it guarantees income for a specified period of time

it provides the highest monthly benefit

agents who sell only variable life insurance and annuities in this state are required to pass all of the following EXCEPT life insurance producer SIE series 6 or 7 variable life and annuities producer

life insurance producer

what does annuity protect the annuitant against? estate taxes leaving beneficiaries without income living longer than expected financial impact caused by premature death

living longer than expected

which of the following is guaranteed under the variable whole life insurance policy? min death benefit interest rates cash value stock performance

min death benefit

an equity indexed annuity will grow based upon a rate of interest determined by the banking system performance of recognized index performance in a separate account current interest rates

performance of recognized index

annuities certain limit the amount paid by the annuity to a certain fixed amount only period or fixed amount period only period with a certain fixed amount

period or fixed amount

how do premiums in variable universal life policies vary from those in variable whole life policies premiums automatically decrease over the life of policy premiums are level premiums automatically increase over the life of policy premiums are flexible

premiums are flexible

If the cash value in a variable life policy decreases, what will happen to the death benefit? it will be reduced to be equal to the cash value it will increase remain the same it will decrease

remain the same

the investment company act of 1940 requires all insurance companies selling variable products to place assets into a separate account revenue account premium account general account

separate account

in a deferred annuity, the difference between the accumulation value and the surrender value is the interest credit mortality charge surrender charge front end loan

surrender charge

which of the following policies would NOT offer a policy loan option variable universal life whole life universal life term life

term life

Which of the following statements is INCORRECT concerning Modified Endowment Contracts? An MEC must always pass 7 pay test A primary purpose of the regulations governing MECs was to reduce incentives for the use of life insurance as a short term investment vehicle a distribution from MEC is subject to 10% tax penalty if before 59.5 A life insurance policy failing the 7 pay test is classified as an MEC

An MEC must always pass 7 pay test

which of the following regulatory bodies has authority over variable life policies? FINRA only The SEC Both FINRA and State insurance departments State insurance departments only

Both FINRA and State insurance departments

Which of the following in a life insurance policy name will indicate that the policyowner is allowed to vary the amount and frequency of premiums? Universal Term Variable Whole

Universal

how many days notice must an insurer provide an insured regarding the lapse of a policy due to outstanding loans 30 days 10 days 15 days 7 days

30 days

Which of the following will be eligible for a tax sheltered annuity Dependents under 21 Military personnel Elderly Public school teachers

Public School Teachers

According to FINRA membership and registration rules for continuing education, the regulatory element must be completed by each registered person annually every 2 years every 3 years after the second anniversary of their initial registration every 4 years after initial training

every 3 years after the second anniversary of their initial registration

what is the max loan amount a policyowner may withdrawal from a variable universal life insurance policy? nothing, loans not allowed under variable universal life an amount up to the face amount of the policy an amount not exceeding the cash value an amount equal to the first year of premium payments

an amount not exceeding the cash value

which provision may be added to a permanent life policy at no cost that insures that the policy will not lapse as long as there is cash value? past due premium options application to reduce premium option mode of premium option automatic premium loan option

automatic premium loan option

in order to receive nonresident variable annuity license in MI a producer must take and pass MI licensing exam surrender their license in their home state be licensed in a state with a reciprocal nonresident licensing maintain a part time residence in MI

be licensed in a state with a reciprocal nonresident licensing

in variable life insurance policy, all of the following assets are held in the insurance company's general account EXCEPT cash surrender values mortality reserves incidental benefit amounts face amount reserves

cash surrender values

The commissioner conducts a legal hearing on a producer that is suspected of chronically violating insurance code by committing an illegal trade practice. the producer is found guilty, what can the commissioner issue? arrest warrant cease and desist order restriction of authority commissioners order

cease and desist order

which of the following statements is true regarding thrift plans? the employer is the sole contributor to the plan the employer contributes a certain amount for each dollar contributed by the employee the employer contributes up to 10% of each employees salary the employee is sole contributor to the plan

the employer contributes a certain amount for each dollar contributed by the employee

if the annuitant dies before the annuity start date, which is true the interest is tax free if the beneficiary is a spouse the interest will not be tax deferred the interest is taxable the interest is nontaxable

the interest is taxable

If an annuity has a guaranteed minimum interest rate, this means the interest rate will not fluctuate the interest rate will never drop below the guaranteed min there is no interest rate the interest rate will never rise above the guaranteed min

the interest rate will never drop below the guaranteed min

if an applicant submits the initial premium with an application, which action constitutes acceptance? insurance company receives the application and initial premium the applicant submits statement of good health the underwriters approve the application the producer delivers policy

the underwriters approve the application

which of the following statements is TRUE regarding the cash value in a variable life policy there is no min guaranteed cash value it is always larger than the face amount there is the min guaranteed cash value it is always smaller than the face amount

there is no min guaranteed cash value

what is the purpose of a surrender charge in a deferred annuity? to punish annuitant for breach of contract to provide additional revenue for insurance company to compensate the company for loss of investment value to prevent the over funding of annuity

to compensate the company for loss of investment value

an important fact about the financial status of an insurer was deliberately withheld. which of the following best describes this action? loading defamation twisting false financial statement

twisting

which of the following has a flexible premium? variable term insurance variable universal life variable whole life guaranteed variable whole life

variable universal life

qualified distributions from a roth IRA may be received as taxable income of both principal and interest when the owner reaches 59.5 as tax deferred benefits as taxable benefits

when the owner reaches 59.5

which of the following would be an example of an insurer participating in the unfair trade practice of discrimination charging the insured higher premiums based on race charging the insured higher premiums based on life expectancy charging diff premium rates to the insureds in different insuring classes making malicious statements about the insureds based on race

charging the insured higher premiums based on race

if the owner of an IRA dies without having named a beneficiary, by what point must the interest be distributed DEC 31, of the calendar year that contains the fifth anniversary of the owners death beginning DEC 31 of the year immediately following the owners death extending over a period of no greater than 5 years Dec 31 of the calendar year that contains the second anniversary of the owners death Dec 31 of the calendar year immediately following owners death, in a lump sum distribution

beginning DEC 31 of the year immediately following the owners death extending over a period of no greater than 5 years

FINRA bylaw that is concerned with the settlement of disputes is the Uniform practice code code of procedure code of arbitration rules of fair practice

code of arbitration

an insured intentionally did not disclose a material fact on an application for insurance. this would be considered coercion avoidance concealment misrepresentation

concealment

which of the following statements is true regarding SIMPLE plans? The employer can contribute up to 5% of the employee's annual compensation the employer cannot contribute to the plan the employee cannot contribute to the plan

contributions and earnings are tax deferred until funds are withdrawn

to be valid an insurance policy must have all of the following EXCEPT countersignature offer acceptance consideration

countersignature

which of the following could reduce the amount of the death benefit? failure to repay a policy loan making premium payments within the grace period choosing a paid-up addition dividend options adding a family term rider

failure to repay a policy loan

which of the following is NOT true regarding a deferred annuity annuity can grow tax deferred it can be purchased in single lump sum it is used to accumulate funds for retirement income payments begin within 1 year from the date of purchase

income payments begin within 1 year from the date of purchase

an annuitant pays the annuity premium on the 14th of each month. which best describes this arrangement level lump sum single flexible

level

in the even an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the annuitants estate named beneficiary next of kin insurance company

named beneficiary

an annuity would normally be purchased by an individual who wants to provide income for retirement earn a higher rate of interest create an estate provide a death benefit to the surviving family

provide income for retirement

an insurance agent visits a potential client and explains various types of policies. the customer displays lack of interest, so the agent guarantees higher dividends than he knows would be possible. which term describes what the agent has done? twisting misrepresentation defamation rebating

rebating