Dont Know’s Pt III

Question 1

What does a 401(k) plan generally provide its participants?

Answer 1

Salary deferral contributions

Question 2

What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?

Answer 2

50%

Question 3

What is the maximum number of employees (earning at least $5000) that an employer can have in order to start a SIMPLE retirement plan?

Answer 3

100

Question 4

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Answer 4

Primary insurance amount (PIA)

Question 5

An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to the employee?

Answer 5

Distribution is subject to federal income tax withholding

Question 6

How are Roth IRA distributions normally taxed?

Answer 6

Distributions are received tax-free

Question 7

Post-tax dollar contributions are found in:

Answer 7

Roth IRA investments

Question 8

A trustee to trustee transfer of rollover funds in a qualified plan allows a participant to avoid:

Answer 8

Mandatory income tax withholding on the transfer amount

Question 9

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

Answer 9

20% is withheld for income taxes

Question 10

Which of the following BEST describes how pre-admission certifications are used?

Answer 10

Used to prevent nonessential medical costs

Question 11

Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?

Answer 11

Prospective review

Question 12

A disability elimination period is best described as a:

Answer 12

Time deductible

Question 13

In a disability income policy, which of these clauses acts as a deductible?

Answer 13

Elimination period

Question 14

Which of the following is not a required provision in group life policies?

Answer 14

Right to loan

Question 15

A $20,000 life insurance policy application is completed, however the producer does not collect the initial premium. At what point does the coverage go into effect?

Answer 15

When the applicant receives the policy and pays the initial premium

Question 16

An underwriter determines that a life insurance applicant’s risk should be reclassified due to a health issue. This policy may be issued with a(n):

Answer 16

Extra premium

Question 17

All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:

Answer 17

The premiums can be lowered or raised, based on investment performance

Question 18

A provision in a life insurance policy that pays the policyowner an amount that does not surpass the guaranteed cash value is called the:

Answer 18

Policy Loan Provision

Question 19

Which of these is an element of a Variable Life policy

Answer 19

A fixed, level premium

Question 20

Which statement is TRUE regarding a Variable Whole Life policy?

Answer 20

A minimum guaranteed death benefit is provided

Question 21

Variable Life products require a producer to

Answer 21

Hold a life insurance license and a securities license

Question 22

K is an annuitant currently receiving payments. If she were to die before receiving payments equal to the correct value, a beneficiary will continue receiving payments until an amount equal to the contract value has been paid. This is called a(n):

Answer 22

Installment refund annuity

Question 23

Whole life insurance policies are contractually guaranteed to provide each of the following, except:

Answer 23

Partial withdrawal features beyond a surrender charge period

Question 24

A policy loan is made possible by which of these life insurance policy features?

Answer 24

Cash value provision

Question 25

M has an insurance policy that also has an outstanding policy loan at the time of M’s death. The insurer will deduct the outstanding loan balance from the:

Answer 25

Policy proceeds

Question 26

All of the following statements regarding a Tax Sheltered Annuity (TSA) are true EXCEPT:

Answer 26

Income derived from the TSA is received income-tax free

Question 27

Which of the following can be defined as a cause of a loss?

Answer 27

Peril

Question 28

A hold-harmless clause is an example of risk __________

Answer 28

Transfer

Question 29

Which of the following Life insurance policies combine term insurance with an investment element?

Answer 29

Universal Life

Question 30

A life policy that contains a monthly mortality charge as well as self-directed investment choices is called a(n)

Answer 30

Variable universal life policy

Question 31

A life policy with a death benefit and cash value that can fluctuate according to the performance of its underlying investment portfolio is referred to as:

Answer 31

Variable life

Question 32

A __________ ___________ Life policy combines investment choices with a form of Term coverage

Answer 32

Variable Universal