State board test part 7
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