NY LIFE ACCIDENT AND HEALTH
INSURANCE AGENT BROKER EXAM SERIES
17-55 EXAMINATION TEST 2026 COMPLETE
200 QUESTIONS WITH SOLUTIONS
GRADED A
⩥ 401k - Tax Sheltered Annuities. Answer: A 401(k) plan is a tax-
advantaged, defined-contribution retirement account offered by many
employers to their employees. It is named after a section of the U.S.
Internal Revenue Code. Workers can make contributions to their 401(k)
accounts through automatic payroll withholding, and their employers
can match some or all of those contributions. The investment earnings in
a traditional 401(k) plan are not taxed until the employee withdraws that
money, typically after retirement. In a Roth 401(k) plan, withdrawals can
be tax-free.
A 401(k) plan is a company-sponsored retirement account that
employees can contribute to. Employers may also make matching
contributions.
There are two basic types of 401(k)s—traditional and Roth—which
differ primarily in how they're taxed.
In a traditional 401(k), employee contributions reduce their income taxes
for the year they are made, but their withdrawals are taxed. With a Roth,
,employees make contributions with post-tax income, but can make
withdrawals tax-free.
⩥ Self-employed Plans (Keogh plans). Answer: Type of retirement plan
designed for self-employed individuals and their employees. It can be set
up by small businesses that are structured as LLCs, sole-proprietorships,
or partnerships. A Keogh is similar to a 401(k) for very small businesses,
but the annual contribution limits are higher than 401(k) limits.
⩥ Simplified Employee Pension (SEP). Answer: retirement plan
designed for self-employed persons, partnerships, sole proprietors,
independent contractors, and owner-employees of an unincorporated
trade or business; however, it may be set up by any type of business. A
SEP is an easy method for a small employer to establish a retirement
plan for employees without the complex administration and expense
found in qualified retirement plans. In fact, an employer may establish a
SEP only if that employer has no qualified retirement plan in effect.
Under a SEP, the employer may make a contribution of up to the lesser
of 15% or $30,000 of compensation to IRAs established in each
employee's name. Hence, such an arrangement is known as a SEP-IRA.
When made, these contributions are owned in their entirety by the
employee, and they may be withdrawn and/or transferred by the
employee at any time. Contributions to a SEP by the employer are
discretionary, but must be deposited into each eligible employee's IRA
when made. Because these accounts are IRAs, the amounts therein are
subject to all IRA rules regarding transfer, withdrawal and taxation.
,⩥ Savings Incentive Match Plan for Employees (SIMPLE). Answer:
Established by the Small Business Protection Act of 1996, a SIMPLE
may be set up by employers who have no other retirement plan and who
have 100 or fewer employees with at least $5,000 in compensation for
the previous year. They may be structured as an IRA or as a 401(k) plan.
Employees may defer any percentage of compensation up to $6,500 per
year to the SIMPLE, and the employer is required to make a matching
contribution of up to 3% of the employee's pay based on that election.
The employer may reduce the maximum matching percentage in any
two years out of five. Alternatively, the employer may establish a
uniform 2% of salary contribution per year for all eligible employees
regardless of whether they contribute to the SIMPLE or not.
⩥ 457 Plan. Answer: Non-qualified, deferred compensation plan
established by state and local governments for tax-exempt government
agencies and tax exempt employees.
While governmental 457 plans have special catch-up provisions for
those age 50 or older, they enjoy an even greater contribution amount in
the three years before retirement. The catch-up provisions three years
prior to retirement will amount to double the normal amount for
allowable maximum contributions. Until withdrawn, 457 plan
contributions and all earnings remain untaxed. The 457 plan assets of
tax-exempt employers are subject to the claims of the employer's
creditors, but those of plans sponsored by governmental entities are not.
Plan distributions may occur at retirement; on separation from
employment; as the result of an unforeseeable emergency; and at death.
, Distributions may be taken as a lump sum, in annual installments, or as
an annuity. In 2002 and later years, proceeds from a governmental 457
plan may be transferred to an IRA or a new employer's 401(k), 403(b) or
457 plan that accepts transfers from an old employer's plan. On
withdrawal from an IRA or from the new plan, the distribution will be
subject to immediate taxation at ordinary income tax rates.
⩥ ownership provision. Answer: provision that states that a policy may
be owned by a different person than the one insured.
⩥ assignment provision. Answer: Transfer by the holder of a life
insurance policy (the assignor) of the benefits or proceeds of the policy
to a lender (the assignee), as a collateral for a loan. In the event of the
death of the assignor, the assignee is paid first and the balance (if any) is
paid to the policy's beneficiary. Other types of insurance policies may
not be used for this purpose.
⩥ Entire Contract Provision. Answer: This is a provision in an insurance
contract stating that the entire agreement between the insured and the
insurer is contained in the contract, including the application if it is
attached, declarations, insuring agreements, exclusions, conditions and
endorsements.
⩥ Right to Examine ("Free Look") Provision. Answer: The free look
period for a life insurance contract is a trail period, typically 10 days.
This period is for policy owners, and is mandated by most states in the
United States. The free look period allows a policy owner to review their
INSURANCE AGENT BROKER EXAM SERIES
17-55 EXAMINATION TEST 2026 COMPLETE
200 QUESTIONS WITH SOLUTIONS
GRADED A
⩥ 401k - Tax Sheltered Annuities. Answer: A 401(k) plan is a tax-
advantaged, defined-contribution retirement account offered by many
employers to their employees. It is named after a section of the U.S.
Internal Revenue Code. Workers can make contributions to their 401(k)
accounts through automatic payroll withholding, and their employers
can match some or all of those contributions. The investment earnings in
a traditional 401(k) plan are not taxed until the employee withdraws that
money, typically after retirement. In a Roth 401(k) plan, withdrawals can
be tax-free.
A 401(k) plan is a company-sponsored retirement account that
employees can contribute to. Employers may also make matching
contributions.
There are two basic types of 401(k)s—traditional and Roth—which
differ primarily in how they're taxed.
In a traditional 401(k), employee contributions reduce their income taxes
for the year they are made, but their withdrawals are taxed. With a Roth,
,employees make contributions with post-tax income, but can make
withdrawals tax-free.
⩥ Self-employed Plans (Keogh plans). Answer: Type of retirement plan
designed for self-employed individuals and their employees. It can be set
up by small businesses that are structured as LLCs, sole-proprietorships,
or partnerships. A Keogh is similar to a 401(k) for very small businesses,
but the annual contribution limits are higher than 401(k) limits.
⩥ Simplified Employee Pension (SEP). Answer: retirement plan
designed for self-employed persons, partnerships, sole proprietors,
independent contractors, and owner-employees of an unincorporated
trade or business; however, it may be set up by any type of business. A
SEP is an easy method for a small employer to establish a retirement
plan for employees without the complex administration and expense
found in qualified retirement plans. In fact, an employer may establish a
SEP only if that employer has no qualified retirement plan in effect.
Under a SEP, the employer may make a contribution of up to the lesser
of 15% or $30,000 of compensation to IRAs established in each
employee's name. Hence, such an arrangement is known as a SEP-IRA.
When made, these contributions are owned in their entirety by the
employee, and they may be withdrawn and/or transferred by the
employee at any time. Contributions to a SEP by the employer are
discretionary, but must be deposited into each eligible employee's IRA
when made. Because these accounts are IRAs, the amounts therein are
subject to all IRA rules regarding transfer, withdrawal and taxation.
,⩥ Savings Incentive Match Plan for Employees (SIMPLE). Answer:
Established by the Small Business Protection Act of 1996, a SIMPLE
may be set up by employers who have no other retirement plan and who
have 100 or fewer employees with at least $5,000 in compensation for
the previous year. They may be structured as an IRA or as a 401(k) plan.
Employees may defer any percentage of compensation up to $6,500 per
year to the SIMPLE, and the employer is required to make a matching
contribution of up to 3% of the employee's pay based on that election.
The employer may reduce the maximum matching percentage in any
two years out of five. Alternatively, the employer may establish a
uniform 2% of salary contribution per year for all eligible employees
regardless of whether they contribute to the SIMPLE or not.
⩥ 457 Plan. Answer: Non-qualified, deferred compensation plan
established by state and local governments for tax-exempt government
agencies and tax exempt employees.
While governmental 457 plans have special catch-up provisions for
those age 50 or older, they enjoy an even greater contribution amount in
the three years before retirement. The catch-up provisions three years
prior to retirement will amount to double the normal amount for
allowable maximum contributions. Until withdrawn, 457 plan
contributions and all earnings remain untaxed. The 457 plan assets of
tax-exempt employers are subject to the claims of the employer's
creditors, but those of plans sponsored by governmental entities are not.
Plan distributions may occur at retirement; on separation from
employment; as the result of an unforeseeable emergency; and at death.
, Distributions may be taken as a lump sum, in annual installments, or as
an annuity. In 2002 and later years, proceeds from a governmental 457
plan may be transferred to an IRA or a new employer's 401(k), 403(b) or
457 plan that accepts transfers from an old employer's plan. On
withdrawal from an IRA or from the new plan, the distribution will be
subject to immediate taxation at ordinary income tax rates.
⩥ ownership provision. Answer: provision that states that a policy may
be owned by a different person than the one insured.
⩥ assignment provision. Answer: Transfer by the holder of a life
insurance policy (the assignor) of the benefits or proceeds of the policy
to a lender (the assignee), as a collateral for a loan. In the event of the
death of the assignor, the assignee is paid first and the balance (if any) is
paid to the policy's beneficiary. Other types of insurance policies may
not be used for this purpose.
⩥ Entire Contract Provision. Answer: This is a provision in an insurance
contract stating that the entire agreement between the insured and the
insurer is contained in the contract, including the application if it is
attached, declarations, insuring agreements, exclusions, conditions and
endorsements.
⩥ Right to Examine ("Free Look") Provision. Answer: The free look
period for a life insurance contract is a trail period, typically 10 days.
This period is for policy owners, and is mandated by most states in the
United States. The free look period allows a policy owner to review their
