Kentucky Life Insurance State Exam Practice Questions with Correct Answers

The premiums paid by an employer for his employee's group life insurance are usually considered to be Correct Answer Tax-deductible to the employer Which of these is NOT considered to be a cost connected with an individual's death? Correct Answer Business expenses These are all accurate statements regarding universal life insurance EXCEPT Correct Answer Policy loans are not permitted Which of these is NOT relevant when determining the amount of personal life insurance needed? Correct Answer Local unemployment rate Who elects the governing body of a mutual insurance company? Correct Answer Policyholders Why would evidence of insurability be required for a person insured with a variable universal life policy? Correct Answer The face amount is increased At what point are death proceeds paid in a joint life policy? Correct Answer When the first insured dies What is considered a valid reason for small businesses to insure the lives of its major shareholders? Correct Answer Fund a buy-sell agreement Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)? Correct Answer Policy loans Dividends from a mutual insurance company are paid to whom? Correct Answer Policyowners Traditional individual retirement annuity (IRA) distributions must start by Correct Answer April 1st of the year following the year the participant attains age 70 1/2 How are Roth IRA distributions normally taxed? Correct Answer Distributions are received tax-free How can an insurance company minimize exposure to loss? Correct Answer Reinsurance All of the following statements about traditional individual retirement accounts are false EXCEPT Correct Answer 10% penalty is applied to withdrawals before age 59 1/2