MN Life and Health Insurance Exam
With 104
The Notice of Replacement provides all of the following pieces of
information to the life insurance applicant EXCEPT:
a. ) a list of any life insurance policies that will be replaced
b.) whether an existing policy will fund the new policy
c.) the insurer's identity
d.) the role of the Department of Insurance in regulating replacement
transactions -Correct Answer ✔ ✔ d.) the role of the Department
of Insurance in regulating replacement transactions
If an employer sets up a profit-sharing plan, which one of the
following statements is most correct?
a.) It must contribute the same amount to the plan each year.
,b.) It must allow employees to contribute up to $15,000 to the plan
each year.
c.) It must allow employees to make elective deferrals to plan
accounts and to adjust their contribution levels at any time.
d.) It must establish individual accounts for each participant. -Correct
Answer ✔ ✔ d.) It must establish individual accounts for each
participant.
From a life insurance regulatory perspective, the primary problem
with stranger-originated life insurance (STOLI) is that it is: -Correct
Answer ✔ ✔ essentially wagering on a stranger's life
Who is the contingent beneficiary in the following beneficiary
designation: "Sally Grant, wife of the insured, if she survives the
insured; otherwise to Frank Grant, brother of the insured; otherwise
to the ASPCA." -Correct Answer ✔ ✔ Frank Grant
,Which of the following statements regarding the tax treatment of
endowment contracts is correct?
a.) Endowment contracts no longer get the good tax treatment given
to life insurance policies.
b.) Endowment contracts are treated like other life insurance policies
for tax purposes.
c.) Congress has given endowment contracts the best tax status of all
types of insurance policies.
d.) Endowment contracts are still popular today because of their good
tax treatment. -Correct Answer ✔ ✔ a.) Endowment contracts no
longer get the good tax treatment given to life insurance policies
Joe, age 35, has a life-paid-up-at-65 limited payment life insurance
policy. Under the policy's waiver of premium rider, if Joe becomes
totally and permanently disabled, premiums will be waived: -Correct
Answer ✔ ✔ to age 65
, Alex owns a "home service" life insurance policy, which means he
most likely pays his premiums in which way? -Correct Answer ✔ ✔
weekly or monthly by mail, automatic deduction from a bank
account, or personally to the agent
Cathy took out a $100,000 decreasing 20-year term life insurance
policy. In the middle of year ten, when the death benefit on her policy
equals $50,000, Cathy dies. What will Cathy's beneficiary get? -Correct
Answer ✔ ✔ $50,000
U.S. tax law requires that retirees begin taking distributions from their
qualified plans no later than April 1 of the year following the year the
participant turns -Correct Answer ✔ ✔ age 70
Natasha is insured under a $500,000 universal life insurance policy.
Her son, Todd, is the beneficiary. On October 1, Natasha took a
$15,000 loan from the policy and died six months later without paying
it back. What amount will Todd receive? -Correct Answer ✔ ✔
$485,000 less any interest owed on the loan
With 104
The Notice of Replacement provides all of the following pieces of
information to the life insurance applicant EXCEPT:
a. ) a list of any life insurance policies that will be replaced
b.) whether an existing policy will fund the new policy
c.) the insurer's identity
d.) the role of the Department of Insurance in regulating replacement
transactions -Correct Answer ✔ ✔ d.) the role of the Department
of Insurance in regulating replacement transactions
If an employer sets up a profit-sharing plan, which one of the
following statements is most correct?
a.) It must contribute the same amount to the plan each year.
,b.) It must allow employees to contribute up to $15,000 to the plan
each year.
c.) It must allow employees to make elective deferrals to plan
accounts and to adjust their contribution levels at any time.
d.) It must establish individual accounts for each participant. -Correct
Answer ✔ ✔ d.) It must establish individual accounts for each
participant.
From a life insurance regulatory perspective, the primary problem
with stranger-originated life insurance (STOLI) is that it is: -Correct
Answer ✔ ✔ essentially wagering on a stranger's life
Who is the contingent beneficiary in the following beneficiary
designation: "Sally Grant, wife of the insured, if she survives the
insured; otherwise to Frank Grant, brother of the insured; otherwise
to the ASPCA." -Correct Answer ✔ ✔ Frank Grant
,Which of the following statements regarding the tax treatment of
endowment contracts is correct?
a.) Endowment contracts no longer get the good tax treatment given
to life insurance policies.
b.) Endowment contracts are treated like other life insurance policies
for tax purposes.
c.) Congress has given endowment contracts the best tax status of all
types of insurance policies.
d.) Endowment contracts are still popular today because of their good
tax treatment. -Correct Answer ✔ ✔ a.) Endowment contracts no
longer get the good tax treatment given to life insurance policies
Joe, age 35, has a life-paid-up-at-65 limited payment life insurance
policy. Under the policy's waiver of premium rider, if Joe becomes
totally and permanently disabled, premiums will be waived: -Correct
Answer ✔ ✔ to age 65
, Alex owns a "home service" life insurance policy, which means he
most likely pays his premiums in which way? -Correct Answer ✔ ✔
weekly or monthly by mail, automatic deduction from a bank
account, or personally to the agent
Cathy took out a $100,000 decreasing 20-year term life insurance
policy. In the middle of year ten, when the death benefit on her policy
equals $50,000, Cathy dies. What will Cathy's beneficiary get? -Correct
Answer ✔ ✔ $50,000
U.S. tax law requires that retirees begin taking distributions from their
qualified plans no later than April 1 of the year following the year the
participant turns -Correct Answer ✔ ✔ age 70
Natasha is insured under a $500,000 universal life insurance policy.
Her son, Todd, is the beneficiary. On October 1, Natasha took a
$15,000 loan from the policy and died six months later without paying
it back. What amount will Todd receive? -Correct Answer ✔ ✔
$485,000 less any interest owed on the loan
