Xcel Solutions Insurance Pre-Test
Which situation accurately describes a reduced paid-up nonforfeiture option? - answer-
Policy has a decreased face amount
- Face amount of the new policy equals that of the original policy
- Cash value is surrendered to policyowner
- Premiums must continue to be paid
Policy has a decreased face amount.
An example of a tax-qualified retirement plan would be a(n) - answer- equity
compensation plan
- defined contribution plan
- executive index plan
- 1035 exchange plan
defined contribution plan.
What will the beneficiary receive if an annuitant dies during the accumulation period? -
answer- The greater of the accumulated cash value or the total premium paid
- The lesser of the accumulated cash value or the total premium paid
- The interest earned on the accumulated cash value
- Nothing
The greater of the accumulated cash value or the total premium paid.
Loans obtained by a policyowner against the cash value of a life insurance policy: -
answer- are treated as taxable income
- would not be treated as taxable income
- are limited by the face amount of the policy
- would be subject to a Federal estate tax
would not be treated as taxable income
A provision in a whole life policy that allows a policyowner to terminate the policy in
return for a reduced paid-up policy of the same type is called a(n) - answer- insuring
clause
- payor provision
- reinstatement provision
- nonforfeiture provision
, A nonforfeiture provision in a cash value life insurance policy allows a policyowner to
terminate the policy in return for a reduced paid-up policy of the same type.
Pre-death distributions from a modified endowment contract (MEC) receive different tax
treatment than other life insurance policies because - answer- the MEC has tax
deductible premiums
- the MEC is considered an illegal product
- the MEC tends to be an investment vehicle
- the MEC does not accumulate cash value
the MEC tends to be an investment vehicle.
A rollover from a Traditional IRA to another IRA MUST be done____days to avoid tax
consequences. - answer- 15
- 30
- 60
- 90
- 60
An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - answer- the insured
outlived the beneficiary
- the beneficiary outlived the insured
- no beneficiary was ever named
- the insured and beneficiary died at the same time
the insured outlived the beneficiary
An error was made on Mary's life insurance application. Which of the following areas do
errors commonly occur on applications and for which the incontestable clause does
NOT apply? - answer- Martial status
- Age
- Address
- Income
Age
How do interest earnings accumulate in a deferred annuity? - answer- On a tax credit
basis
- on a tax-deferred basis
- on a tax-free basis
- on a taxable basis
on a tax-deferred basis
Which situation accurately describes a reduced paid-up nonforfeiture option? - answer-
Policy has a decreased face amount
- Face amount of the new policy equals that of the original policy
- Cash value is surrendered to policyowner
- Premiums must continue to be paid
Policy has a decreased face amount.
An example of a tax-qualified retirement plan would be a(n) - answer- equity
compensation plan
- defined contribution plan
- executive index plan
- 1035 exchange plan
defined contribution plan.
What will the beneficiary receive if an annuitant dies during the accumulation period? -
answer- The greater of the accumulated cash value or the total premium paid
- The lesser of the accumulated cash value or the total premium paid
- The interest earned on the accumulated cash value
- Nothing
The greater of the accumulated cash value or the total premium paid.
Loans obtained by a policyowner against the cash value of a life insurance policy: -
answer- are treated as taxable income
- would not be treated as taxable income
- are limited by the face amount of the policy
- would be subject to a Federal estate tax
would not be treated as taxable income
A provision in a whole life policy that allows a policyowner to terminate the policy in
return for a reduced paid-up policy of the same type is called a(n) - answer- insuring
clause
- payor provision
- reinstatement provision
- nonforfeiture provision
, A nonforfeiture provision in a cash value life insurance policy allows a policyowner to
terminate the policy in return for a reduced paid-up policy of the same type.
Pre-death distributions from a modified endowment contract (MEC) receive different tax
treatment than other life insurance policies because - answer- the MEC has tax
deductible premiums
- the MEC is considered an illegal product
- the MEC tends to be an investment vehicle
- the MEC does not accumulate cash value
the MEC tends to be an investment vehicle.
A rollover from a Traditional IRA to another IRA MUST be done____days to avoid tax
consequences. - answer- 15
- 30
- 60
- 90
- 60
An insured individual and the policy's beneficiary die from the same accident. The
common disaster provision states the insurer will continue as if - answer- the insured
outlived the beneficiary
- the beneficiary outlived the insured
- no beneficiary was ever named
- the insured and beneficiary died at the same time
the insured outlived the beneficiary
An error was made on Mary's life insurance application. Which of the following areas do
errors commonly occur on applications and for which the incontestable clause does
NOT apply? - answer- Martial status
- Age
- Address
- Income
Age
How do interest earnings accumulate in a deferred annuity? - answer- On a tax credit
basis
- on a tax-deferred basis
- on a tax-free basis
- on a taxable basis
on a tax-deferred basis
