Guaranteed exam 5

which of the following policies would NOT offer a policy loan option?

Term life

which of the following statements concerning the Medical Information Bureau is correct?

The Medical Information Bureau assist underwriters in evaluation and classifying risk

In a noncontributory group policy

100% of eligible employees must participate

what is a specific requirement regarding the number of employees in a SIMPLE plan

No more than 100 employees

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

An annuity would normally be purchased by an individual who wants to

Provide income for retirement

According to the common disaster clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured

cash value guarantees in a whole life policy are a called

nonforfeiture values.

An insured has a life insurance policy in the amount of $250,000 naming his wife as beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for some time. When she finally receives the death benefit check, it's in the amount of $250,530. is any portion of the proceeds that the beneficiary receives taxable?

Yes, proceeds in excess of face amount are taxable as interest.

which dividend option will increase the death benefit?

Paid-up additions

Which of the following will be eligible for a tax-sheltered annuity?

Public school teachers

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

Which of the following is NOT an indicator of a competent party?

Business profession

All of the following are true of a nonqualified deferred compensation plan EXCEPT

Contributions are tax deductible

An individual has a $200,000 convertible term life insurance policy. if he chooses, he can

Convert to a whole life policy for the same face amount without proof of insurability

How will life insurance proceeds that are paid as a lump sum received by the beneficiary?

Free of federal income taxation

Under what circumstances will the contingent beneficiary receive the death benefit?

If the primary beneficiary dies before the insured

If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan

Immediately

which of the following is NOT true regarding a deferred annuity?

Income payments begin within 1 year from the date of purchase

If a life insurance policy is purchased by someone who has no insurable interest in the insured, it is considered

STOLI

what does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

All of the following are consideration in an insurance policy EXCEPT

The cash value in the policy

An insured decides to surrender his Whole Life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be income taxable?

The difference between the premiums paid and the cash value

All of the following are general requirements of a qualified plan EXCEPT

The plan must be temporary

which of the following policies would NOT offer a policy loan option?

term life