Exam Simulator 200

Question 1

A Whole Life Insurance Policy endows when

Answer 1

The cash value equals the death benefit

Question 2

A Whole Life Insurance Policy endows when

Answer 2

The cash value equals the death benefit

Question 3

A Return of Premium life insurance policy is

Answer 3

Whole life and increasing term

Question 4

What is the income tax withholding requirement on a rollover?

Answer 4

20%

Question 5

True or false: With a Straight Life Annuity, the insurer must make full payments to the beneficiary after the annuitant dies

Answer 5

False: the insurer does not have to make further payments after the annuitant dies

Question 6

This is NOT an example of a nonforfeiture option

Answer 6

Life income

Question 7

This rider is triggered by the insured’s inability to perform two or more activities of daily living

Answer 7

Long term care

Question 8

A policyowner may assign ownership of the policy to _____ as collateral

Answer 8

A bank

Question 9

What action should a producer take if the initial premium is NOT submitted with the application?

Answer 9

Forward the application to the insurer without the initial premium

Question 10

The investment gains from a Universal Life Policy usually go toward

Answer 10

The cash value

Question 11

The investment gains from a Universal Life Policy usually go toward

Answer 11

The cash value

Question 12

The exchange of unequal values reflects which of the following insurance contract features?

Answer 12

Insurance contracts are aleatory

Question 13

Insurance contracts are _____ . This means that only one party (the insurer) makes any kind of enforceable promise.

Answer 13

Unilateral

Question 14

A nonforfeiture clause give the policyowner

Answer 14

Guaranteed values even if the policy has lapsed

Question 15

A person who is insured within a group contract will be given a

Answer 15

Certificate

Question 16

On delivery of a policy, a _____ is typically requested if the application was submitted without the initial premium.

Answer 16

Signed statement of good health

Question 17

A company that owns a life insurance policy on one of its key employees may NOT

Answer 17

Change the policy’s interest rate

Question 18

True or false: The lender is authorized to assign a Life insurance policy as collateral for a loan.

Answer 18

False: a life insurance policy may ONLY be assigned as collateral by the policyowner

Question 19

A _____ may be used by a sole proprietor only if the employees of the business are included

Answer 19

Keogh Pension Plan

Question 20

Dividends paid from a life insurance policy are

Answer 20

Issued by the insurer

Question 21

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Answer 21

Split-dollar plan

Question 22

Which policy requires an agent to register with the National Association of Securities Dealers (NASD) before selling?

Answer 22

Variable Life

Question 23

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

Answer 23

Variable Universal

Question 24

In a Life insurance contract, an insurance company’s promise to pay stated benefits is called the

Answer 24

Insuring clause

Question 25

Insurance policies are considered aleatory contracts because

Answer 25

Performance is conditioned upon a future occurrence

Question 26

The combination of Whole Life and _____ Term insurance is referred to as a Family Income Policy

Answer 26

Decreasing

Question 27

Accumulated interest earned on dividends from an insurance policy is

Answer 27

Taxed as ordinary income

Question 28

A new general property and casualty licensee must complete at LEAST _____ hours of continuing education within 24 months of initial licensure

Answer 28

24

Question 29

In a qualified retirement plan, the yearly contributions to an employee’s account

Answer 29

Are restricted to maximum levels set by the IRS

Question 30

Unpaid interest from a policy loan is _____ if not paid by the due date

Answer 30

Added to the loan balance

Question 31

Max number of employees to start a SIMPLE retirement plan

Answer 31

100

Question 32

When funds are shifted straight from one IRA to another IRA, what percentage of tax is withheld?

Answer 32

None

Question 33

A non-contributory plan requires _____ participation of all eligible employees

Answer 33

100%

Question 34

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 34

50%

Question 35

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

Answer 35

When the conditions of the receipt are met

Question 36

The payments on Q’s annuity are no less than $250 quarterly. What type of annuity is it?

Answer 36

Flexible Installment Deferred

Question 37

How long does an insurance company appointment remain in force?

Answer 37

Until terminated

Question 38

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

Answer 38

Ordinary income tax and a 10% tax penalty for early withdrawal

Question 39

How does an indexed annuity differ from a fixed annuity?

Answer 39

Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index

Question 40

A variable annuity pays benefits based on _____ rather than specific dollar amounts

Answer 40

Units

Question 41

A(n) _____ Life policy offers the owner investment in products such as money-market funds, long-term bonds and equities

Answer 41

Variable

Question 42

NOT an element of life insurance premiums

Answer 42

Morbidity rate