Life insurance review quiz

If sally owned a $200,000 life insurance policy with an accidental death benefit rider, and Sally was accidentally struck by a truck on June 3, 2016, but died of her injuries on July 10, 2016 what would be the pay out to her beneficiary

$400,000

Alex is going to surrender her $300,000 whole life policy. Alex had paid $40,000 in premium and her total cash value stands at $90,000. When she surrenders her policy, on what amount would Alex have to pay income tax

$50,000

If Rob owns a $200,000 life insurance policy and name says for children as per capita beneficiaries on his policy at his death what would be the payout to his four children

$50,000 each

Which life insurance policy would offer the highest premium payment and quickest cash value build up

10 pay whole life

What is the minimum age by which a person can legally enter into a life insurance policy

14 1/2

If Richard invested 200,000 into his annuity during the accumulation Phase and his Annuity grew to a total of 350,000 at the annuitization face. How much of his total accumulative investment is considered fully taxable

150,000

You must be at least___to obtain a life settlement brokers license

18

Which would not be considered a prohibitive act in the business of settling a life settlement Transaction

A life settlement broker fully disclosing the material aspects of the life settlement transaction

Which annuity best fits this description; a one time investment, made with after-tax dollars, offering several investment options, with income paid at a specific date or time in the future

A non-qualified, single premium deferred variable annuity

Which approach to calculating life insurance needs would take into consideration the replacement value of lost income over the working lifetime of an individual should that individual die prematurely

Human life value

Marge has recently discussed with an insurance agent about a type of life insurance policy which build cash value and earns an interest rate based on the investment performance of a preselected stock index. Which type of policy has the agent discussed with Marge

In equity index life policy

Generally loans taken out against the life insurance policy Are received

Income tax free

Which of the following would be considered replacement activity

Intentional lapse of a policy, policy converted to reduced paid up insurance, policy re-issued with any reduction in cash value

Dividends on a whole life policy left to accumulate at interest are treated how for taxation purposes

Interest earned off the dividend is fully taxable as ordinary income

Upon the advice of their agent Joanne and Bert have taken out a specific life insurance policy that will pay their calculated federal and state taxes after both of passed away which policy have they purchased

Joint and survivorship

Which type of qualified retirement plan would a Self-employed individual generally contribute to

KEOGH (HR 10) plan

Which licensed entity is qualified to negotiate a life settlement transaction

Life settlement broker

Which of the following is true of loans taken out on the life insurance policy

Loans do not have to be repaid, but will reduce the death benefit

Which Federal act reaffirms the primary role of The states to regulate insurance, and matters concerning interstate commerce fall under the purview of the federal government

McCarran Ferguson act

A group life policy covers

More than one employee under a single policy

What are the premium factors that make up gross premium of a life insurance policy

Mortality expenses and investments

Annuities are designed based on

Mortality tables

As a general rule illustrations used in the sale of a life insurance policy should contain which of the following basic information

Name of insurance company, underwriting or rating classification upon which the illustration is based, a prominent label stating life insurance illustration

Which of the following criteria would be considered unfair discrimination on the part of an insurance company underwriting a policy

National origin, religious affiliation

A direct rollover of qualified plan monies to another qualified plan without taking receipt of the monies would result in

None of the monies are subject to taxation or IRS penalties

If a life insurance policy is to be replaced the agents responsibility should be to

Obtain a list of all life insurance or annuity contracts to be replaced, provide a notice regarding replacement to the insured applicant to be signed by both agent and applicant, submit to the replacing insurance company a copy of the notice regarding replacement

Which death benefit option on a universal life allows for the cash value to be added to the death benefit

Option B

Credit life insurance is a specialty type of policy that is generally designed to

Pay off a debt owed to a creditor upon the death of the debtor

If the loan is taken out against the life insurance policy and the insured dies prior to the loan being paid us the insurance company would generally

Pay the death benefit to the beneficiary minus the outstanding loan principal and any accrued interest

Which of the following resources could be used by a life underwriter to determine if an individual is an acceptable risk to receive a life insurance policy

The MIB, medical examination, DMV report

This entity is considered an advocate of the insurance industry and collectively serves to protect the public interest with regard to the insurance industry

The NAIC

Endowment of a whole life policy means

The cash value equals the face amount of the policy at age 100

This feature on a variable annuity allows the annuitant to withdraw a maximum percentage of their investment annually until the entire initial investment has been recovered

The guaranteed minimum withdrawal benefit

What happens when a whole life policy endows at the insured's age 100

The policy death benefits are payable to the policy owner

The dividends generated by a stock company would be payable to

The stock/shareholders

The basic guide to buying life insurance called a buyers guide should be presented to the insured/applicant by the agent at

Time of application

The incontestable period In a life insurance policy is

Two years

Jenny is told by her agent that if she ops to add this writer benefit to her life insurance policy the insurer in the event of her total disability (for at least six months), would pay her premiums to a specified date or age

Waiver of premium

Permanent life insurance generally refers to which type of policy that provides lifetime protection and remains in effect to age 100 as long as the premiums are paid

Whole life

Which is not considered part of the entire contract

All sales literature pertaining to the sale

Which is considered to be complete relinquishment or giving up of policy ownership rights

An absolute assignment

An annuity can provide which of the following

An income you cannot outlive, income at retirement, tax-deferred growth on earnings

Which of the following is not an insurable interest relationship

An individual ensuring her second cousin

Which of the following is not an example of third-party ownership

An individual takes out insurance on his/her own life

Which would be considered a form of Stoli (stranger Originated life insurance);

An individual taking out insurance on another individual when there is no insurable interest relationship

This type of life insurance buy-sell arrangement is typically used in partnerships

And entity purchase, a cross purchase

When selling a variable life insurance policy and agent should consider

And insured's investment risk tolerance, need for life insurance, investment time horizon

A term policy that is renewable each year within an increase in premium at attained age without evidence of insurability is called

Annual renewable term

Which of the following would not constitute a life settlement

At 10:35 exchange, employer own life insurance on a key employee, and assignment of life policy to an individual

What is the feature on a cash value life insurance policy that would allow the policy owner to borrow an amount from the policy cash value equal to the premium to prevent the unintentional lapse of the policy

Automatic premium loan

Term life insurance has the following characteristics except

Cash value

The payment of premium and the truthful statements made on an application describes the

Consideration

Life insurance can be used to accomplish which of the following

Create an estate, provide survivor income, pay for funeral expenses

What rider on the life insurance policy allows for the purchase of additional life insurance on specific policy option dates without evidence of insurability

Guaranteed insurability rider

The policy owner of the policy, with full contractual ownership rights, the policy owner can do all of the following except

Determined premium rates

Qualified retirement plans fall under which federal regulation

ERISA 1974

Variable life insurance products are regulated by

FINRA, Department of financial services (DFS), SEC

A joint life policy pays its death benefit when the

First insured dies

Which annuity offers an initial rate guarantee for 2 to 3 years then will pay a current prevailing interest rate that will never fall below a guaranteed minimum interest rate

Fixed annuity

An independent business owner contracted by an insurance company to represent and sell it's products, and is responsible for recruiting supervising and training an agent is an example of what kind of agency distribution system

General agency

An agent has informed Jeff that it would be beneficial for him to include a rider on his life insurance policy that would allow him as specified policy intervals to purchase more life insurance even if he had a major illness like cancer. what life insurance rider is the agent referring to

Guaranteed insurability rider

Sandy owner of XYZ Manufacturing has been advised by his insurance agent that purchasing a key employee life insurance on his production manager could accomplish which of the following

Protect the financial interest of the business should the key employee die unexpectedly, compensate the business for the loss of the key employee, provide cash flow to the business so the business is not immediately disrupted from loss of revenue

Ronaldo has decided that he can no longer afford his whole life insurance policy. Which nonforfeiture option could be exercise however that would allow him to retain a lower death benefit would not require him to make any other premium payments and still maintain a policy to age 100

Reduced paid up

All of the following are available different options on a participating whole life policy except

Reduced paid up insurance

Replaced life insurance policies are subject to which regulation

Regulation 60

Melissa and John are contemplating investing monies on behalf of their two young children to fund their future college education. which investment plan would be best suited to accomplish that goal

Section 529 plan

Which would be considered a prohibitive use of a title by the Department of financial services when selling to the senior/elder care marketplace

Senior elder care specialist, certified senior care specialist, certified senior advisor

A fixed annuity has all of the following features except

Separate investment accounts

Which of the following is not a characteristic/feature of universal life

Separate investment accounts

Which license or a combination of licenses would be required to sell a variable life policy

Series 6 or 7, 63 and life licenses

The risk classification for life insurance that would indicate an average mortality risk would be

Standard

Which annuity settlement option will pay income To the annuitant for as long as they live at time of distribution, but pay nothing to a survivor at the Annuitants death

Straight life or life only refund option

Which type of whole life policy would pay level premium term for life and the policy endows at age 100

Straight or continuous pay whole life

As a general principle the cash accumulation within life and annuity contract grows

Tax deferred

Life insurance proceeds paid out in a lump sum to the beneficiary are generally received

Tax free