In general, what is the earliest age at which a person can take a distribution from a qualified plan without a tax penalty? - correct answer 59
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Carol was 35 when she bought her deferred annuity. Now, at age 38, she wants to withdraw funds from the contract to take a vacation. Carol is likely to encounter all of the following consequences in making the withdrawal EXCEPT: - correct answer statutory minimum withholding requirements
What kind of misrepresentation on an insurance application gives the insurer reason to terminate a policy? - correct answer material fact
Which of the following riders attached to Debra's life insurance policy provides for a monthly income to be paid if she becomes disabled? - correct answer disability income benefit rider
In calculating their life insurance premiums, which of the following statements generally guides insurance companies in determining the "loading" factor? - correct answer Total loading from all policies should cover total operating costs, provide a safety margin, and contribute to profits or surplus.
What is the main difference between ordinary whole life and limited payment whole life insurance? - correct answer the length of time that the insured must pay premiums
Abby lives in New Mexico, where she is licensed as an insurance agent and wants to apply for a nonresident license in Arizona. She holds a current license in good standing in New Mexico. When applying for a license in Arizona, Abby must prove her citizenship by submitting: - correct answer a valid driver's license
Matt takes out a life insurance policy on himself to protect his family. Matt's insurance company may consider all of the following when underwriting his policy EXCEPT: - correct answer his race
Under which of the following do the cash values and death benefits rise and fall on the basis of the policy's subaccount investment performance, and for which the insurer does not guarantee a rate of return on the cash value invested? - correct answer variable life
To help determine how much life insurance a prospect needs, agent Smith uses the human life value approach which is essentially based on an estimate of the prospect's: - correct answer net future earnings discounted to a present value
Which one of the following statements about Multiple Employer Welfare Arrangements (MEWAs) is most correct? - correct answer They are usually created by employers in the same industry.
Which of the following best describes income payments under the period certain payout option? - correct answer the longer the payout period, the smaller the amount of each monthly payment
Delta Co. buys a group life insurance policy for its employees. As the plan sponsor, what will Delta receive? - correct answer a policy
Margie owns a fixed life insurance policy. What type of death benefit is Margie guaranteed? - correct answer The policy guarantees a fixed amount.
What is the minimum grace period required for payment on an annuity? - correct answer 30 days
Which one of the following has more than "an expectancy" that he or she will receive the death benefit under a life insurance policy? - correct answer an irrevocable beneficiary
An agent for ABC Insurance Company meets with a client. The agent shows the client ABC's sample policies, refers to the ABC rate book, and gives the client an ABC business card. The client assumes that ABC has appointed the agent to represent it. What kind of authority does the agent have? - correct answer apparent authority
Which statement about variable annuity subaccounts is NOT correct? - correct answer The insurer selects the variable subaccounts to which the contract owner's premiums are allocated.
Stephanie is hired by ABC Insurance Company's home office. She does not have an insurance producer's license. Which of the following duties may she perform for ABC? - correct answer mail company correspondence for the president
The life insurance nonforfeiture option that results in the permanent continuation of cash value life insurance with no further premiums is called the: - correct answer reduced paid-up option
A life insurance policy may accelerate payment of the death benefit for any of the following reasons EXCEPT: - correct answer partial, temporary disability
The formal name for what is commonly called a 'double indemnity' rider is: - correct answer accidental death benefit rider
Which of the following statements about life insurance accelerated living benefits riders or provisions is correct? - correct answer They let the insured access a portion of the policy's face amount while still alive.
A worker can also choose to collect permanently reduced Social Security benefits as early as what age? - correct answer 62
Stuart states that he is 30 years old in a life insurance application, though he is 35. What will the insurer do when this misstatement is discovered? - correct answer reduce the policy face amount
John, age 62, retired early and is receiving Social Security retirement benefits. He has one child, Sara, age 16. What will happen if Sara is in a car accident and becomes disabled? - correct answer Sara will be eligible to receive a monthly Social Security benefit until her disability ends, whatever age that may be.
What term is used to describe the monthly income amount a fixed annuity could provide per $1,000 of accumulated value? - correct answer annuity purchase rate
What must an annuity owner do to withdraw funds from his or her annuity contract? - correct answer request it from the insurer
The entire contract provision specifies that all statements the policyowner makes in the application are considered which of the following? - correct answer representations
In general, life insurance death benefits paid to a beneficiary in a lump sum are not taxed. Which statement is correct if the payout option is other than a lump sum? - correct answer Interest earnings are taxable income to the beneficiary.
Which of the following statements most correctly describes the relationship, if any, between the application and the insurance contract? - correct answer The application is part of the entire contract.
What is the primary difference between a revocable and an irrevocable beneficiary? - correct answer the policyowner's ability or inability to change the beneficiary designation
All the following statements regarding annuity death benefits are correct EXCEPT: - correct answer Annuity death benefits are income tax-free.
Bob owns a whole life insurance policy that pays $400 in policy dividends this year. He decides to use the $400 to purchase additional whole life insurance. Which of the following has Bob selected as a dividend option? - correct answer paid-up additions
Able Life Insurance Co. receives proofs of loss with a claim for benefits on April 1. It must settle the claim no later than what date? - correct answer May 31
The premium on Jim's life insurance policy is due on October 1, but he fails to pay it. The insurer determines that he has defaulted on the policy. In this case, the insurance company must provide a paid-up policy with a reduced face amount no later than - correct answer November 30
Brenda owns a nonqualified deferred annuity. Through a Section 1035 exchange, she can exchange her annuity income tax-free for which of the following? - correct answer a nonqualified annuity only
Which statement is correct about the types of insurance sales systems? - correct answer Direct response companies sell insurance to consumers without the use of a licensed producer. [Show Less]