State board test part 7

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Lump sum cash surrenders are

Taxable

Which of the following indicates the person upon whose life the annuity income amount is determined

Annuitant

Accumulation on annuities are tax deferred in _________ annuities and not tax deferred in ________

Individual and corporate owned

What type of interest rate is guaranteed in universal life policies

contract interest rate

What is the difference between a straight life policy and a 20 pay whole life policy

Premium payment period

At what point would an automatic premium loan be generated

Following the grace period

The owner of a deferred annuity pays $100 in premium one month and $130 the next month. Which of the following terms describes the premium payment arrangements

Flexible premium

All of the following statements about indexed whole life insurance are correct except

The policy face amount remains level throughout the life of the policy

Interest sensitive whole life

AKA Current assumption life is a whole life policy where the insurer sets the initial premium based on current assumptions about risk, interest and expense

Contributions to both IRAs are

Not tax deductible

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 the portion of the proceeds that the beneficiary receives taxable

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

In terms of contracts, a waiver is when someone

Gives up a known right or privellege

Which of the following governs the non taxable exchange of certain life insurance policies and annuities

Section 1035 exchange

If the annuitant dies before the annuity start date,

The interest is taxable

In life insurance underwriting all of the following are true regarding HIV testing except

The person may be denied coverage based solely on the presence of HIV

The insurer determines the appropriate type of insurance to meet the insured needs based on the amount willing to pay

Adjustable life

If the annuitant dies before the annuity start date which of the following is true

The interest is taxable

An IRA contribution can be made from which of the following

Cash

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be a

Representation

All of the following statements about indexed whole life insurance is correct except

The policy face amount remains level throughout the life of the policy

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest so the agent guarantees higher dividends that he knows wouldn't be possible. Which term describes what the agent did

Misrepresentation

Which of the following statements is true regarding advertising that the insurance guaranty association would ensure payment of benefits in the event of insurer insolvency

It is an unfair trade practice to mention association in advertisements

Which of the following best defines the unfair trade practice of rebating

Offering an inducement of something of value not specified in the policy

All of the following are true regarding a producer's fiduciary responsibility except

Producers may commingle personal funds with company funds

An agent decides to start selling variable life insurance products what must the agent do before transacting this type of insurance

Register with FINRA

a form of an individual retirement account funded with after-tax contributions

Roth IRA

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

The plan must be temporary

the policyowner may even skip paying a premium and the policy will not lapse as long as there is sufficient cash value at the time to cover the monthly deductions for cost of insurance

Universal life

Life insurance creates an immediate estate. Which of the following best explains this statement

The face value of the policy is payable to the beneficiary upon the death of the insured

plans that require no government approval and are used as a means for an employer to discriminate in favor of a valuable employee with regard to employee benefits.

Non qualified

All of the following are true about key person insurance except

The death benefit is taxable to the business

An insurance policy that builds cash value and remains in effect for the life of the insured or when it endows

Permanent whole life


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