Small errors 3
#29. Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT a) Pre-existing conditions that were previously covered may not be covered under the replacing policy. b) Benefits may change. c) Premiums always stay the same. d) Due to age or health, the policy may change dramatically.
C
#5. Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member? a) Spouse rider b) Children's rider c) Additional insured rider d) Family term rider
D
#8. Which of the following is NOT true of a major-medical health insurance policy? a) It usually has a maximum benefit amount. b) The benefits are subject to deductibles. c) It is designed to cover hospital and medical expenses of a catastrophic nature. d) It is designed to pay on a first dollar of expense basis.
D
11: Death benefits payable to a beneficiary under a life insurance policy are generally A Subject to income taxation by the Federal Government. B Exempt from income taxation if under $10,000. C Exempt from income taxation if over $10,000. D Not subject to income taxation by the Federal Government.
D
#24. Stranger-originated life insurance policies are in direct opposition to the principle of a) Insurable interest. b) Law of large numbers. c) Good faith. d) Indemnity.
A
#1. All of the following are true about variable products EXCEPT a) Policyowners bear the investment risk. b) The premiums are invested in the insurer's general account. c) The minimum death benefit is guaranteed. d) The cash value is not guaranteed.
B
#11. Which characteristic does NOT describe managed care? a) Unlimited access to providers b) High-quality care c) Shared risk d) Preventive care
D
#17. Which of the following programs expands individual public assistance programs for people with insufficient income and resources? a) Medicare b) Social Security c) Unemployment compensation d) Medicaid
D
14: Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? A Third-party ownership B An irrevocable beneficiary C A buy-sell agreement D Family term rider
A
#18. All of the following are TRUE statements regarding the accumulation at interest option EXCEPT a) The policyholder has the right to withdraw the accumulations at any time. b) The interest is not taxable since it remains inside the insurance policy. c) The annual dividend is retained by the company. d) The interest is credited at a rate specified by the policy
B
#23. Which is generally true regarding insureds who have been classified as preferred risks? a) They keep a higher percentage of any interest earned on their policies. b) Their premiums are lower. c) They can borrow higher amounts off of their policies. d) They can decide when to pay their monthly premiums.
B
7: All of the following are general requirements of a qualified plan EXCEPT A The plan must be permanent, written and legally binding. B The plan must provide an offset for social security benefits. C The plan must be communicated to all employees. D The plan must be for the exclusive benefits of the employees and their beneficiaries.
B
#26. Which of the following statements concerning group health insurance is CORRECT? a) Under group insurance, the insurer may reject certain individuals from coverage. b) The employer is the policyholder. c) Only the employer receives a certificate of insurance. d) Each employee receives a policy.
B
#29. Who can make a fully deductible contribution to a traditional IRA? a) A person whose contributions are funded by a return on investment b) An individual not covered by an employer-sponsored plan who has earned income c) Anybody; all IRA contributions are fully deductible regardless of income level d) Someone making contributions to an educational IRA
B
#21. Which of the following is NOT true regarding Equity Indexed Annuities? a) They have guaranteed minimum interest rates. b) They are less risky than variable annuities. c) They earn lower interest rates than fixed annuities. d) The insurance company keeps a percentage of the returns.
C
#25. Which of the following is NOT true regarding policy loans? a) An insurer can charge interest on outstanding policy loans. b) A policy loan may be repaid after the policy is surrendered. c) Money borrowed from the cash value is taxable. d) Policy loans can be repaid at death.
C
#36. An annuity contract is issued to a senior consumer over age 65. What is the maximum surrender charge for a withdrawal of money allowed on this annuity? a) 5% b) 8% c) 10% d) 12%
C
9: Which of the following is NOT true regarding a nonqualified retirement plan? A Earnings grow tax deferred. B It needs IRS approval. C Contributions are not currently tax deductible. D It can discriminate in benefits and selecting participants
B
3: All of the following are business uses of life insurance EXCEPT A Compensating executives. B Funding against financial loss caused by the death of a key employee. C Funding business continuation agreements. D Funding against company's general financial loss.
D
8: Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? A Those who have worked in the company for at least 3 years B Those who have dependents C Those who have no history of claims D Those who have been insured under the plan for at least 5 years
D