Life and Health
An individual purchased $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?
$100,000
When the owner of a $250,000 life insurance policy died, the beneficiary decided to leave the proceeds of the policy with the insurance company and selected the Interest Settlement Option. If at the time of withdrawal the interest paid was $11,000, the beneficiary would be required to pay income tax on
$11000
minimum age in new york to have life insurance
14 1/2
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403 B Plan TSA
what is the waiting period on a waiver of premium rider in life insurance policies
6 months
at what age does an individual qualify for medicare
65
if an association is applying for a life settlement broker's license, which of the following requirements must the association meet
Authorize a natural person to act individually as a broker
When the policy owner specified a dollar amount in which installments are to be paid, he/she has chosen which settlement option?
Fixed amount
in life insurance policies, cash value increases
Grow tax deferred
Insured buys a 5 year level premium term policy with a face amount of $10000. Policy also contains renewability and convertibility options. When insured renews in 5 years, what happens to the premium?
It will increase because the insured will be 5 years older than when the policy was originally issued. It will remain level during the term of the policy, but upon renewal it will be based on the insured's attained age.
an insured commits suicide one year after his life insurance policy was policy was issued. The insurer will?
Refund the premiums paid
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
STOLI
all of the following may use a 403 B plan for retirement except
The CEO of a private corporation
all of the following regulate variable life insurance policies except
The Guaranty Association
An insured purchased a 10 year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10 year term?
The insured may renew the policy for another 10 years, but at a higher premium rate.
annuity
a contract that provides income for a specified period of years or for life. Protects a person from outliving their money
Which of the following best defines the owner of a life settlement contract?
a person who is selling the contract
Which of the following is not an allowable 1035 exchange?
a whole life insurance policy in exchange for a term insurance policy
Employer contributions made to a qualified plan ?
are subject to vesting requirements
at what point must an outline coverage be delivered
at the time of initial application or delivery
Which of the following best describes fixed period settlement options?
both the principal and interest will be liquidated over a selected period of time
Adjustable Life
can be term or whole life premium can be increased or decreased by policyowners face amount is flexible and set with proof of insurability cash value is a fixed rate of return can borrow cash value
under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
cash surrender
a tax sheltered annuity is a special tax favored retirement plan available to
certain groups of employees only
the type of policy that can be changed from one that does not accumulate cash value to one that does
convertible term policy
which of the following is true regarding STOLI in the state of NY
direct or indirect participation in STOLI is prohibited
for a retirement plan to be qualified it myst be designated for the benefit of?
employees
Under a defined benefit retirement plan, who determines what benefits a retired employee will receive?
employer
all of the following are true regarding tax qualified annuities except
employer contributions are not tax deductible
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would life a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)...
equity indexed annuity
which of the following is used to determine the annuity amounts that are not taxable
exclusion ratio
if taken as a lump sum, life insurance proceeds to beneficiaries are passed
free of federal income taxation
in a direct rollover, how is the money transferred from one plan to the new one
from trustee to trustee
which of the following is true about a defined benefit plan?
high-salaried employees with only a few years until retirement receive the highest contribution
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
income tax on distributions and no penalty
Stranger-Originated Life Insurance are in direct opposition to the principle of
insurable interest
parties to an insurance contract
insurer, policyowner, insured, beneficianary
which of the following is true of a qualified plan?
it has a tax benefit for both employee and employer
which of the following is not true regarding policy loans
money borrowed from the cash value is taxable
Death benefits payable to a beneficiary under a life insurance policy are generally
not subject to income taxation by the federal goverment
under a pure life annuity an income is payable by the company
only for the life of the annuitant
which universal life option has a gradually increasing cash value and a level death benefit
option A
which option for universal life allows the beneficiary to collect both the death benefit and cash value apon the death of the insured
option b
traditional IRA contributions are tax deductible based on which of the following
owner's income
universal life
permanent insurance with renewable term protection flexible premium face amount is flexible and set by policy owner with proof of insurability cash value is guaranteed at a minimum level can borrow cash value
policyowner is responsible for paying
premiums
type of license to sell life insurance
producer license and security license
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
proof of insurability is not required
An insured pays 1200 annually for her life life insurance premium. The insured applies this years 300 worth of accumulation dividends to the next years premium thus reducing it to 900. What option does this describe
reduction of premium
what type of dental insurance covers a filling
routine and major restorative care
which part of the internal revenue code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences
section 1035 policy exchange
Which two terms are associated directly with the way an annuity
single payment or periodic payment
what type of whole life insurance policies only requires a payment of premium at its inception, and in addition to providing insurance protection for the life of the insured, endows at the insureds age of 100
single premium whole life
An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?
there is nothing wrong with delivery by certified mail
How are contributions to a tax-sheltered annuity treated with regards to taxation?
they are not included as income for the employee, but are taxable upon distribution
which of the following statements regarding conditional receipts is true
they are temporary insuring agreements
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
universal life
what policy is interest sensitive
universal life
what annuity requires a securities license
variable
a health insurance policy may cover all of the following risks except
war related injuries
credit life insurance
written to insure the life of a debtor and pay the balance of a loan in case of death. Creditor is the owner and beneficiary
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3000
joint life (first to die)
meant to insure two or more lives can be term insurance or permanent insurance premium is based on the joint average age between insureds benefit is paid upon death only
which of the following explains the policy owner's right to change beneficiaries, choose options, and receive proceeds of a policy?
owner's rights
an insured states her age as 40 on the application. When she dies, the insurer discovers that she as actually only 37 at the time of application. What will the insurance company do?
pay the death benefit in the amount that premium at the correct age would have purchased
variable life
permanent insurance fixed if whole life, flexible if universal life face amount can increase or decrease cash value is not guaranteed can borrow cash value
A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why
the purpose of the group was to buy life insurance
policyowner and insured may be
the same or different persons
life settlement contracts must be approved by which of the following
the superintendent of insurance
Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
life expectancy
limited pay life insurance policy
life paid-up at age 65
the person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract is the
life settlement broker
the form used to establish the terms for both parties when a person sells his life insurance policy to a 3rd unrelated person is called
life settlement contract
life expectancy is used in the calculation of
life settlements
if an annuitant selects the straight life annuity settlement option, in order to receive all of the money outof the contract, it would be necessary to:
live at least to his life expectancy
the premium of a survivorship policy vs a joint life policy would be
lower
A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called
1035 exchange
A long stretch of national economic hardship causes a 7% rate of inflation. A policy owner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider cause this change?
cost of living rider
which of the following is not allowed in credit life insurance
creditor requiring that a debtor buys from a certain insurer
when a life insurance was issued, the policyowner designated a primary and a contingent beneficiary. several years later, both the insured and the primary died in the same car accident, and it was impossible to determine who died first. which of the following would receive the death benefit?
insured's contingent beneficiary
which of the following is not true regarding the accumulation period of an annuity?
it would not occur in a deferred annuity
3 types of life insurance
level, increasing, decreasing
if an annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
settlement option
Survivorship Life (second to die)
similar to first to die except the benefit is paid when the second person dies
an ira purchased by a small employer to cover employees is known as a
simplified employee pension plan
Medicaid is sponsored by what kind of sources?
state and federal
in order to be a licensed life settlement broker, a person must complete which of the following requirements
submit fingerprints
which of the following would an accident only policy not cover
surgery to repair a wrist damaged by tendonitis
all of the following would be different between qualified and non qualified retirement plans except
taxation of accumulation
which of the following best describes taxation during the accumulation period of annuity
taxes are deferred
which of the following characteristics applies to defined benefit plans but not defined contribution plans?
the amount of contributions made to the employer is determined by an actuarial formula
which of the following is not true regarding annuitant
the annuitant cannot be the same person as the annuity owner
all of the following statements are true regarding installments for a fixed amount except
the installments will stop when the annuitant dies
A 40-year old man buys a whole life policy and names his wife as his beneficiary. His wife dies 10 years later. He never remarries and dies at age 61, leaving 2 grown-up children. Assuming he never changed the beneficiary, the proceeds will go toA. The insurance companyB. The insured's estateC. The insured's firstborn childD. Both children who share equally on per-capita basis
the insured's estate
An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims?
the insurer
hospital indemnity/ hospital confinement indemnity policy will provide payment based on
the number of days confined in a hospital
in a life settlement contract who does the life settlement broker represent
the owner of the policy
all of the following are general requirements of a qualified plan except
the plan must provide an offset for social security benefits
An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?
the policy will terminate when the loan amount with interest equals or exceeds the cash value
