©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
RMI 211 Exam 4 Study Guide with
Complete Solutions
A contingency beneficiary in a life insurance policy has the right to -
Answer✔️✔️-receive the policy proceeds if the primary beneficiary dies
before the insured
A legal reserve in life insurance is a result of - Answer✔️✔️-excess premiums
in the early policy years being invested at compound interest
All of the following are nonforfeiture options found in cash value life
insurance policies EXCEPT - Answer✔️✔️-reduction of premiums
All of the following are requirements that must be satisfied before
premiums are waived under a wave-of-premium provision EXCEPT -
Answer✔️✔️-The insured must satisfy a 2-year waiting period
All of the following statements about ordinary life insurance are true
EXCEPT - Answer✔️✔️-The face amount of the policy is paid if the insured
lives to age 65
All of the following statements about the conversion of a term policy are
true EXCEPT - Answer✔️✔️-Evidence of insurability is required before a
conversion is permitted
All of the following statements about the income tax treatment of
individually-purchased life insurance are true EXCEPT - Answer✔️✔️-
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
premiums paid for the individual life insurance are a tax deductible
expense
An immediate life annuity offers all of the following benefits EXCEPT -
Answer✔️✔️-immediate annuity payments are entirely exempt from federal
income tax
Ann is considering the purchase of a life insurance policy with these
characteristics: flexible premium payments, the insurance and savings
components are separate, the interest rate credited to the cash value is tied
to a changing market interest rate but a minimum interest rate is
guaranteed, and a monthly administrative fee is charged. Ann is
considering buying - Answer✔️✔️-universal life insurance
Becky is considering the purchase of a whole life policy on her own life.
She is concerned that if she becomes disabled, paying premiums will
become a burden. Which provision can Becky attach to her life insurance
policy to address this concern? - Answer✔️✔️-waiver-of-premium provision
Brad owns a cash value life insurance policy. Last year, the cash value
increased by $300. Brad received $100 in policyholder dividends on the
policy last year which remained in the policy. Brad was the beneficiary
named in his grandmother's $50,000 life insurance policy. When she died
this past year, Brad received $50,000. How much taxable income relating to
life insurance must Brad report for federal income tax purposes? -
Answer✔️✔️-$0
2
RMI 211 Exam 4 Study Guide with
Complete Solutions
A contingency beneficiary in a life insurance policy has the right to -
Answer✔️✔️-receive the policy proceeds if the primary beneficiary dies
before the insured
A legal reserve in life insurance is a result of - Answer✔️✔️-excess premiums
in the early policy years being invested at compound interest
All of the following are nonforfeiture options found in cash value life
insurance policies EXCEPT - Answer✔️✔️-reduction of premiums
All of the following are requirements that must be satisfied before
premiums are waived under a wave-of-premium provision EXCEPT -
Answer✔️✔️-The insured must satisfy a 2-year waiting period
All of the following statements about ordinary life insurance are true
EXCEPT - Answer✔️✔️-The face amount of the policy is paid if the insured
lives to age 65
All of the following statements about the conversion of a term policy are
true EXCEPT - Answer✔️✔️-Evidence of insurability is required before a
conversion is permitted
All of the following statements about the income tax treatment of
individually-purchased life insurance are true EXCEPT - Answer✔️✔️-
1
, ©SOPHIABENNETT@2024-2025 Monday, August 26, 2024 6:09 AM
premiums paid for the individual life insurance are a tax deductible
expense
An immediate life annuity offers all of the following benefits EXCEPT -
Answer✔️✔️-immediate annuity payments are entirely exempt from federal
income tax
Ann is considering the purchase of a life insurance policy with these
characteristics: flexible premium payments, the insurance and savings
components are separate, the interest rate credited to the cash value is tied
to a changing market interest rate but a minimum interest rate is
guaranteed, and a monthly administrative fee is charged. Ann is
considering buying - Answer✔️✔️-universal life insurance
Becky is considering the purchase of a whole life policy on her own life.
She is concerned that if she becomes disabled, paying premiums will
become a burden. Which provision can Becky attach to her life insurance
policy to address this concern? - Answer✔️✔️-waiver-of-premium provision
Brad owns a cash value life insurance policy. Last year, the cash value
increased by $300. Brad received $100 in policyholder dividends on the
policy last year which remained in the policy. Brad was the beneficiary
named in his grandmother's $50,000 life insurance policy. When she died
this past year, Brad received $50,000. How much taxable income relating to
life insurance must Brad report for federal income tax purposes? -
Answer✔️✔️-$0
2
