State Exam Simulator - 90 Questions Weighted Exam Questions & Answers 100% Accurate

A "premature" distribution from a modified endowment contract (MEC) incurs a penalty tax of - ANSWER-10% In an individual retirement account (IRA), rollover contributions are - ANSWER-unlimited by dollar amount An example of rebating would be - ANSWER-splitting the commission with the buyer on a sale of insurance Premature IRA distributions are subject to a penalty tax of - ANSWER-10% Under the Law of Agency, the principal is considered to be - ANSWER-the insurer Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate? - ANSWER-The premium to purchase the coverage comes from the policy's cash value Insurable interest involves what assumption? - ANSWER-One person benefits from another person's continued life Death benefits from a life insurance policy are normally considered to be - ANSWER-exempt from federal income tax How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision? - ANSWER-6 months A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid - ANSWER-mandatory income tax withholding on the amount transferred