State Exam Simulator - 90 Questions Weighted Exam
A "premature" distribution from a modified endowment contract (MEC) incurs a penalty tax of
10%
Premature IRA distributions are subject to a penalty tax of
10%
How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?
6 months
Which statement regarding universal life insurance is correct
Cash value accumulations have a guaranteed minimum interest rate
Which of these is NOT an Unfair Claims Settlement Practice?
Denying unsubstantiated claims on a timely basis
Which statement is INCORRECT about the interest-only settlement option in a life insurance policy?
Interest on proceeds must be paid by the beneficiary
Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?
Loan amount is increased to reflect the amount of interest due
Insurable interest involves what assumption?
One person benefits from another person's continued life
Which of the following entities does NOT establish regulations for variable insurance products?
State attorney general
Which statement concerning adjustable life insurance is accurate?
The face amount and premiums can be changed simultaneously by the policyowner
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
If replacement was involved in the sale of an insurance policy, a producer must provide a replacement notice no later than the
application date
In a qualified retirement plan, the yearly contributions to an employee's account
are restricted to minimum levels set by the IRS
Viatical settlement proceeds may be subect to the claims of
creditors
Death benefits from a life insurance policy are normally considered to be
exempt from federal income tax
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the amount transferred
A signed good health statement may be requested by a life producer at the time of
policy delivery
An example of rebating would be
splitting the commission with the buyer on a sale of insurance
When testing for the Human Immunodeficiency Virus (HIV), Virginia law requires a consent form
that discloses who may receive a copy of the results
Under the Law of Agency, the principal is considered to be
the insurer
The owner's cost basis for a non-qualified deferred annuity is typically the same as the
total premiums paid
In an individual retirement account (IRA), rollover contributions are
unlimited by dollar amount
