Life Insurance Exam questions IDAHO questions and answers verified 100

Life Insurance Exam questions IDAHO questions and answers verified 100 Which of the following statements describes one of the reasons individuals purchase life insurance? - 2. It creates an immediate estate. How long is the grace period for an individual life insurance policy? - 1 month In this state the owner gets a "free look" of a specified number of days from - Delivery of the policy Which of the following would be likely to establish a SEP? - Smalls employers If a soliciting producer suspects that there could be misrepresentation on the part of the applicant for insurance, what must the producer do? - inform the insurance company Cash Value guarantees in a whole life policy are called - NONFORFEITURE VALUES. Because permanent life insurance policies have cash values, there are certain guarantees that are built into the policy that cannot be forfeited by the policyowner. These guarantees (known as nonforfeiture values) are required by state law to be included in the policy. A table showing the nonforfeiture values must be included in the policy for a minimum period of 20 years. The policyowner has options as to how to exercise nonforfeiture values. Which of the following statements concerning the Medical Information Bureau is correct? - 4. The Medical Information Bureau assists underwriters in evaluating and classifying risks. Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy? - ACCIDENTAL DEATH RIDER. The Accidental Death Rider pays some multiple of the face amount if death is the result of an accident as defined in the policy. If a retirement plan or annuity is qualified, this means - 3. It satisfies IRS requirements for favorable tax treatment. Which of the following is NOT a personal use of life insurance? - 4. An individual buys insurance to fund a buy-sell agreement. Which of the following is true of the taxation of cash values in a business life insurance policy? - Cash values grow tax deferred. The cash value of a business owned life insurance policy or an employer provided policy accumulates on a tax-deferred basis and is taxed in the same manner as an individually owned policy. Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECs)? - An MEC must always pass the 7-pay test. Life insurance contracts must pass the 7-pay test; otherwise, they become classified as Modified Endowment Contracts (MECs), and policy loans or withdrawals will be subject to taxation as provided by the regulation. If investment funds are withdrawn or borrowed prior to age 59½, they will also be subject to a 10% penalty. For an insurance contract, the principle of utmost good faith means - 3. Each party relies upon the truthfulness of the other. All of the following statements are true regarding an Ordinary (Straight) Life policy E