Life insurance review quiz
If sally owned a $200,000 life insurance policy with an accidental death benefit rider, and Sally was accidentally struck by a truck on June 3, 2016, but died of her injuries on July 10, 2016 what would be the pay out to her beneficiary
$400,000
Alex is going to surrender her $300,000 whole life policy. Alex had paid $40,000 in premium and her total cash value stands at $90,000. When she surrenders her policy, on what amount would Alex have to pay income tax
$50,000
If Rob owns a $200,000 life insurance policy and name says for children as per capita beneficiaries on his policy at his death what would be the payout to his four children
$50,000 each
Which life insurance policy would offer the highest premium payment and quickest cash value build up
10 pay whole life
What is the minimum age by which a person can legally enter into a life insurance policy
14 1/2
If Richard invested 200,000 into his annuity during the accumulation Phase and his Annuity grew to a total of 350,000 at the annuitization face. How much of his total accumulative investment is considered fully taxable
150,000
You must be at least___to obtain a life settlement brokers license
18
Which would not be considered a prohibitive act in the business of settling a life settlement Transaction
A life settlement broker fully disclosing the material aspects of the life settlement transaction
Which annuity best fits this description; a one time investment, made with after-tax dollars, offering several investment options, with income paid at a specific date or time in the future
A non-qualified, single premium deferred variable annuity
Which approach to calculating life insurance needs would take into consideration the replacement value of lost income over the working lifetime of an individual should that individual die prematurely
Human life value
Marge has recently discussed with an insurance agent about a type of life insurance policy which build cash value and earns an interest rate based on the investment performance of a preselected stock index. Which type of policy has the agent discussed with Marge
In equity index life policy
Generally loans taken out against the life insurance policy Are received
Income tax free
Which of the following would be considered replacement activity
Intentional lapse of a policy, policy converted to reduced paid up insurance, policy re-issued with any reduction in cash value
Dividends on a whole life policy left to accumulate at interest are treated how for taxation purposes
Interest earned off the dividend is fully taxable as ordinary income
Upon the advice of their agent Joanne and Bert have taken out a specific life insurance policy that will pay their calculated federal and state taxes after both of passed away which policy have they purchased
Joint and survivorship
Which type of qualified retirement plan would a Self-employed individual generally contribute to
KEOGH (HR 10) plan
Which licensed entity is qualified to negotiate a life settlement transaction
Life settlement broker
Which of the following is true of loans taken out on the life insurance policy
Loans do not have to be repaid, but will reduce the death benefit
Which Federal act reaffirms the primary role of The states to regulate insurance, and matters concerning interstate commerce fall under the purview of the federal government
McCarran Ferguson act
A group life policy covers
More than one employee under a single policy
What are the premium factors that make up gross premium of a life insurance policy
Mortality expenses and investments
Annuities are designed based on
Mortality tables
As a general rule illustrations used in the sale of a life insurance policy should contain which of the following basic information
Name of insurance company, underwriting or rating classification upon which the illustration is based, a prominent label stating life insurance illustration
Which of the following criteria would be considered unfair discrimination on the part of an insurance company underwriting a policy
National origin, religious affiliation
A direct rollover of qualified plan monies to another qualified plan without taking receipt of the monies would result in
None of the monies are subject to taxation or IRS penalties
If a life insurance policy is to be replaced the agents responsibility should be to
Obtain a list of all life insurance or annuity contracts to be replaced, provide a notice regarding replacement to the insured applicant to be signed by both agent and applicant, submit to the replacing insurance company a copy of the notice regarding replacement
Which death benefit option on a universal life allows for the cash value to be added to the death benefit
Option B
Credit life insurance is a specialty type of policy that is generally designed to
Pay off a debt owed to a creditor upon the death of the debtor
If the loan is taken out against the life insurance policy and the insured dies prior to the loan being paid us the insurance company would generally
Pay the death benefit to the beneficiary minus the outstanding loan principal and any accrued interest
Which of the following resources could be used by a life underwriter to determine if an individual is an acceptable risk to receive a life insurance policy
The MIB, medical examination, DMV report
This entity is considered an advocate of the insurance industry and collectively serves to protect the public interest with regard to the insurance industry
The NAIC
Endowment of a whole life policy means
The cash value equals the face amount of the policy at age 100
This feature on a variable annuity allows the annuitant to withdraw a maximum percentage of their investment annually until the entire initial investment has been recovered
The guaranteed minimum withdrawal benefit
What happens when a whole life policy endows at the insured's age 100
The policy death benefits are payable to the policy owner
The dividends generated by a stock company would be payable to
The stock/shareholders
The basic guide to buying life insurance called a buyers guide should be presented to the insured/applicant by the agent at
Time of application
The incontestable period In a life insurance policy is
Two years
Jenny is told by her agent that if she ops to add this writer benefit to her life insurance policy the insurer in the event of her total disability (for at least six months), would pay her premiums to a specified date or age
Waiver of premium
Permanent life insurance generally refers to which type of policy that provides lifetime protection and remains in effect to age 100 as long as the premiums are paid
Whole life
Which is not considered part of the entire contract
All sales literature pertaining to the sale
Which is considered to be complete relinquishment or giving up of policy ownership rights
An absolute assignment
An annuity can provide which of the following
An income you cannot outlive, income at retirement, tax-deferred growth on earnings
Which of the following is not an insurable interest relationship
An individual ensuring her second cousin
Which of the following is not an example of third-party ownership
An individual takes out insurance on his/her own life
Which would be considered a form of Stoli (stranger Originated life insurance);
An individual taking out insurance on another individual when there is no insurable interest relationship
This type of life insurance buy-sell arrangement is typically used in partnerships
And entity purchase, a cross purchase
When selling a variable life insurance policy and agent should consider
And insured's investment risk tolerance, need for life insurance, investment time horizon
A term policy that is renewable each year within an increase in premium at attained age without evidence of insurability is called
Annual renewable term
Which of the following would not constitute a life settlement
At 10:35 exchange, employer own life insurance on a key employee, and assignment of life policy to an individual
What is the feature on a cash value life insurance policy that would allow the policy owner to borrow an amount from the policy cash value equal to the premium to prevent the unintentional lapse of the policy
Automatic premium loan
Term life insurance has the following characteristics except
Cash value
The payment of premium and the truthful statements made on an application describes the
Consideration
Life insurance can be used to accomplish which of the following
Create an estate, provide survivor income, pay for funeral expenses
What rider on the life insurance policy allows for the purchase of additional life insurance on specific policy option dates without evidence of insurability
Guaranteed insurability rider
The policy owner of the policy, with full contractual ownership rights, the policy owner can do all of the following except
Determined premium rates
Qualified retirement plans fall under which federal regulation
ERISA 1974
Variable life insurance products are regulated by
FINRA, Department of financial services (DFS), SEC
A joint life policy pays its death benefit when the
First insured dies
Which annuity offers an initial rate guarantee for 2 to 3 years then will pay a current prevailing interest rate that will never fall below a guaranteed minimum interest rate
Fixed annuity
An independent business owner contracted by an insurance company to represent and sell it's products, and is responsible for recruiting supervising and training an agent is an example of what kind of agency distribution system
General agency
An agent has informed Jeff that it would be beneficial for him to include a rider on his life insurance policy that would allow him as specified policy intervals to purchase more life insurance even if he had a major illness like cancer. what life insurance rider is the agent referring to
Guaranteed insurability rider
Sandy owner of XYZ Manufacturing has been advised by his insurance agent that purchasing a key employee life insurance on his production manager could accomplish which of the following
Protect the financial interest of the business should the key employee die unexpectedly, compensate the business for the loss of the key employee, provide cash flow to the business so the business is not immediately disrupted from loss of revenue
Ronaldo has decided that he can no longer afford his whole life insurance policy. Which nonforfeiture option could be exercise however that would allow him to retain a lower death benefit would not require him to make any other premium payments and still maintain a policy to age 100
Reduced paid up
All of the following are available different options on a participating whole life policy except
Reduced paid up insurance
Replaced life insurance policies are subject to which regulation
Regulation 60
Melissa and John are contemplating investing monies on behalf of their two young children to fund their future college education. which investment plan would be best suited to accomplish that goal
Section 529 plan
Which would be considered a prohibitive use of a title by the Department of financial services when selling to the senior/elder care marketplace
Senior elder care specialist, certified senior care specialist, certified senior advisor
A fixed annuity has all of the following features except
Separate investment accounts
Which of the following is not a characteristic/feature of universal life
Separate investment accounts
Which license or a combination of licenses would be required to sell a variable life policy
Series 6 or 7, 63 and life licenses
The risk classification for life insurance that would indicate an average mortality risk would be
Standard
Which annuity settlement option will pay income To the annuitant for as long as they live at time of distribution, but pay nothing to a survivor at the Annuitants death
Straight life or life only refund option
Which type of whole life policy would pay level premium term for life and the policy endows at age 100
Straight or continuous pay whole life
As a general principle the cash accumulation within life and annuity contract grows
Tax deferred
Life insurance proceeds paid out in a lump sum to the beneficiary are generally received
Tax free
