Iowa Life Exam
____ of personal life insurance premiums is usually deductible for federal income tax purposes.
- ANS - 0%
\________ is the authority given to a producer to transact business on behalf of the insurer -
ANS - appointment
\_________ is the act of offering an applicant something of value as an inducement to purchase
an insurance policy - ANS - rebating
\A __________ __________ is the signed document that starts the free-look period - ANS -
delivery receipt
\A ___________ ____________ Life policy combines investment choices with a form of Term
coverage - ANS - Variable Universe
\A _____________ Life policy offers the owner investment in products such as money-market
funds, long-term bonds and equities. - ANS - Variable
\A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan,
minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? -
ANS - Income taxes plus a 20% penalty tax on $30,000
\A company that owns a life insurance policy on one of its key employees may do all the
following except: - ANS - change the policy's interest rate
\A contract owner terminates an annuity before the income payment period begins. The owner
will then receive - ANS - the current contract surrender value
\A Cost of Living rider gives the insured - ANS - additional death benefits
\A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - ANS - Payor provision
\A life insurance policy that provides a policyowner with cash value along with a level face
amount is called: - ANS - Whole life
\A life insurance policyowner may sell their policy to a ________________ in order to receive a
percentage of the policy's face value - ANS - viatical settlement provider
\A life policy loan in Iowa cannot charge a fixed rate of interest higher than - ANS - 8%
\A life policy that contains a monthly mortality charge as well as self-directed investment choices
is called a - ANS - Variable Universal Life policy
\A Limited-Pay Life policy has: - ANS - premium payments limited to a specified number of years
\A long-term care lapse notice must be delivered to both the applicant and - ANS - secondary
addressee
\A Nonforfeiture clause gives the policyowner - ANS - guaranteed values even if the policy has
lapsed
\A person covered by a group major medical policy leaves the group and converts the coverage
to an individual policy. Which of the following statements is incorrect about the new policy? -
ANS - it pays the same benefits as the group policy
\A policy loan is made possible by which of these life insurance policy features? - ANS - Cash
value provision
, \A policy that becomes a Modified Endowment Contract (MEC): - ANS - will lose many of its tax
advantages
\A policyowner may generate taxable income from which of the following Dividend Options? -
ANS - Accumulation at Interest
\A producer must notify the Insurance Division within ___ days of a felony conviction - ANS - 30
\a producer suggesting that an insurance policy is like a share of stock - ANS -
misrepresentation
\A producer's license may be suspended or revoked if the licensee - ANS - writes primarily
controlled business
\A provision in a life insurance policy that pays the policyowner an amount that does not surpass
the guaranteed cash value is called the: - ANS - Policy Loan provision
\A Return of Premium life insurance policy is: - ANS - Whole life and Increasing term
\A term life insurance policy matures: - ANS - upon the insured's death during the term of the
policy
\A Term Life rider offers the insured - ANS - additional life coverage
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid -
ANS - mandatory income tax withholding on the transfer amount
\A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner
can see the interest earned, cost of insurance, and the - ANS - expense charges
\A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner
can see the interest earned, expense charges, and the - ANS - expense charges
\A Whole Life insurance policyowner does not have the right to - ANS - change the grace period
\A whole life insurance policyowner does not wish to continue making premium payments.
Which of the following enables the policyowner to sell the policy for more than its cash value? -
ANS - Life settlement contract
\ABC Insurance Company has accepted a life insurance application which contains unanswered
questions. The company then makes the application part of the life contract. In this situation, the
insurer has - ANS - waived one of its legal rights
\According to Iowa law, a group life insurance policy requires a minimum of how many insureds?
- ANS - 10
\Additional coverage can be added to a Whole Life policy by adding a: - ANS - decreasing term
rider
\Additional coverage can be added to a Whole Life policy by adding a(n) - ANS - decreasing
term rider
\All of the following statements regarding a Tax Sheltered Annuity are true except - ANS -
income derived from the TSA is received income tax-free
\All of these are characterstics of an Adjustable Life policy, except: - ANS - face amount can be
adjusted using policy dividends
\All of these are considered to be a benefit under Social Security, except - ANS - unemployment
\All of these Settlement options involve the systematic liquidation of the death proceeds in the
event of the insured's death EXCEPT - ANS - Interest only
\All of these statements about Equity Indexed Life Insurance are correct, except: - ANS - the
premiums can be lowered or raised, based on investment performance
____ of personal life insurance premiums is usually deductible for federal income tax purposes.
- ANS - 0%
\________ is the authority given to a producer to transact business on behalf of the insurer -
ANS - appointment
\_________ is the act of offering an applicant something of value as an inducement to purchase
an insurance policy - ANS - rebating
\A __________ __________ is the signed document that starts the free-look period - ANS -
delivery receipt
\A ___________ ____________ Life policy combines investment choices with a form of Term
coverage - ANS - Variable Universe
\A _____________ Life policy offers the owner investment in products such as money-market
funds, long-term bonds and equities. - ANS - Variable
\A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan,
minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over? -
ANS - Income taxes plus a 20% penalty tax on $30,000
\A company that owns a life insurance policy on one of its key employees may do all the
following except: - ANS - change the policy's interest rate
\A contract owner terminates an annuity before the income payment period begins. The owner
will then receive - ANS - the current contract surrender value
\A Cost of Living rider gives the insured - ANS - additional death benefits
\A father who dies within 3 years after purchasing a life insurance policy on his infant daughter
can have the policy premiums waived under which provision? - ANS - Payor provision
\A life insurance policy that provides a policyowner with cash value along with a level face
amount is called: - ANS - Whole life
\A life insurance policyowner may sell their policy to a ________________ in order to receive a
percentage of the policy's face value - ANS - viatical settlement provider
\A life policy loan in Iowa cannot charge a fixed rate of interest higher than - ANS - 8%
\A life policy that contains a monthly mortality charge as well as self-directed investment choices
is called a - ANS - Variable Universal Life policy
\A Limited-Pay Life policy has: - ANS - premium payments limited to a specified number of years
\A long-term care lapse notice must be delivered to both the applicant and - ANS - secondary
addressee
\A Nonforfeiture clause gives the policyowner - ANS - guaranteed values even if the policy has
lapsed
\A person covered by a group major medical policy leaves the group and converts the coverage
to an individual policy. Which of the following statements is incorrect about the new policy? -
ANS - it pays the same benefits as the group policy
\A policy loan is made possible by which of these life insurance policy features? - ANS - Cash
value provision
, \A policy that becomes a Modified Endowment Contract (MEC): - ANS - will lose many of its tax
advantages
\A policyowner may generate taxable income from which of the following Dividend Options? -
ANS - Accumulation at Interest
\A producer must notify the Insurance Division within ___ days of a felony conviction - ANS - 30
\a producer suggesting that an insurance policy is like a share of stock - ANS -
misrepresentation
\A producer's license may be suspended or revoked if the licensee - ANS - writes primarily
controlled business
\A provision in a life insurance policy that pays the policyowner an amount that does not surpass
the guaranteed cash value is called the: - ANS - Policy Loan provision
\A Return of Premium life insurance policy is: - ANS - Whole life and Increasing term
\A term life insurance policy matures: - ANS - upon the insured's death during the term of the
policy
\A Term Life rider offers the insured - ANS - additional life coverage
\A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid -
ANS - mandatory income tax withholding on the transfer amount
\A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner
can see the interest earned, cost of insurance, and the - ANS - expense charges
\A Universal Life policy is sometimes referred to as an unbundled Life Policy because the owner
can see the interest earned, expense charges, and the - ANS - expense charges
\A Whole Life insurance policyowner does not have the right to - ANS - change the grace period
\A whole life insurance policyowner does not wish to continue making premium payments.
Which of the following enables the policyowner to sell the policy for more than its cash value? -
ANS - Life settlement contract
\ABC Insurance Company has accepted a life insurance application which contains unanswered
questions. The company then makes the application part of the life contract. In this situation, the
insurer has - ANS - waived one of its legal rights
\According to Iowa law, a group life insurance policy requires a minimum of how many insureds?
- ANS - 10
\Additional coverage can be added to a Whole Life policy by adding a: - ANS - decreasing term
rider
\Additional coverage can be added to a Whole Life policy by adding a(n) - ANS - decreasing
term rider
\All of the following statements regarding a Tax Sheltered Annuity are true except - ANS -
income derived from the TSA is received income tax-free
\All of these are characterstics of an Adjustable Life policy, except: - ANS - face amount can be
adjusted using policy dividends
\All of these are considered to be a benefit under Social Security, except - ANS - unemployment
\All of these Settlement options involve the systematic liquidation of the death proceeds in the
event of the insured's death EXCEPT - ANS - Interest only
\All of these statements about Equity Indexed Life Insurance are correct, except: - ANS - the
premiums can be lowered or raised, based on investment performance
