Kentucky Life Insurance State Exam
Practice|100 Accurate Q’s and A’s
The premiums paid by an employer for his employee's group life insurance
are usually considered to be - -Tax-deductible to the employer
- Which of these is NOT considered to be a cost connected with an
individual's death? - -Business expenses
- These are all accurate statements regarding universal life insurance
EXCEPT - -Policy loans are not permitted
- Which of these is NOT relevant when determining the amount of personal
life insurance needed? - -Local unemployment rate
- Who elects the governing body of a mutual insurance company? - -
Policyholders
- Why would evidence of insurability be required for a person insured with a
variable universal life policy? - -The face amount is increased
- At what point are death proceeds paid in a joint life policy? - -When the
first insured dies
- What is considered a valid reason for small businesses to insure the lives of
its major shareholders? - -Fund a buy-sell agreement
- Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)? - -Policy loans
- Dividends from a mutual insurance company are paid to whom? - -
Policyowners
- Traditional individual retirement annuity (IRA) distributions must start by -
-April 1st of the year following the year the participant attains age 70 1/2
- How are Roth IRA distributions normally taxed? - -Distributions are
received tax-free
- How can an insurance company minimize exposure to loss? - -Reinsurance
- All of the following statements about traditional individual retirement
accounts are false EXCEPT - -10% penalty is applied to withdrawals before
age 59 1/2
, - All of these statements concerning universal life insurance are false
EXCEPT - -Policy indicates how much of the premium is used toward
company expenses
- A 55 year old recently received a $30,000 distribution from a previous
employer's 401k plan, minus $10,000 withholding. Which federal taxes apply
if none of the funds were rolled over? - -Income taxes plus a 10% penalty
tax on $30,000
- For insurance purposes, similar objects which are exposed to the same
perils are referred to as - -Homogeneous exposure units
- In an individual retirement account (IRA), rollover contributions are - -Not
limited by dollar amount
- What is the maximum number of employees (earning at least $5,000) that
an employer can have in order to start a SIMPLE retirement plan? - -100
- Which statement concerning a decreasing term life policy is accurate? - -
Face amount decreases over time
- All of these are considered features of whole life insurance EXCEPT - -
Initial premium is lower than for an equivalent amount of term insurance
- An employer that offers a qualified retirement plan to its employees is
eligible to - -Make tax-deductible contributions to the plan
- The insurance coverage in a variable life insurance policy may fluctuate
based on the value of - -Its underlying investments
- How long is a person covered for under a limited pay whole life policy? - -
Until age 100
- When does an insured stop making payments under a thirty-payment
whole life policy? - -When the insured dies or 30 years from the policy's
inception, whichever comes first
- What does a fixed life annuity offer protection against? - -Savings
depletion because of longevity
- When does interest income in a deferred annuity get reported for federal
income taxes? - -When the distributions are received
- Which statement regarding the cash value of a whole life insurance policy
is correct? - -Payable to the policy owner when policy has been surrendered
Practice|100 Accurate Q’s and A’s
The premiums paid by an employer for his employee's group life insurance
are usually considered to be - -Tax-deductible to the employer
- Which of these is NOT considered to be a cost connected with an
individual's death? - -Business expenses
- These are all accurate statements regarding universal life insurance
EXCEPT - -Policy loans are not permitted
- Which of these is NOT relevant when determining the amount of personal
life insurance needed? - -Local unemployment rate
- Who elects the governing body of a mutual insurance company? - -
Policyholders
- Why would evidence of insurability be required for a person insured with a
variable universal life policy? - -The face amount is increased
- At what point are death proceeds paid in a joint life policy? - -When the
first insured dies
- What is considered a valid reason for small businesses to insure the lives of
its major shareholders? - -Fund a buy-sell agreement
- Which action will trigger a penalty tax on premature distributions from a
modified endowment contract (MEC)? - -Policy loans
- Dividends from a mutual insurance company are paid to whom? - -
Policyowners
- Traditional individual retirement annuity (IRA) distributions must start by -
-April 1st of the year following the year the participant attains age 70 1/2
- How are Roth IRA distributions normally taxed? - -Distributions are
received tax-free
- How can an insurance company minimize exposure to loss? - -Reinsurance
- All of the following statements about traditional individual retirement
accounts are false EXCEPT - -10% penalty is applied to withdrawals before
age 59 1/2
, - All of these statements concerning universal life insurance are false
EXCEPT - -Policy indicates how much of the premium is used toward
company expenses
- A 55 year old recently received a $30,000 distribution from a previous
employer's 401k plan, minus $10,000 withholding. Which federal taxes apply
if none of the funds were rolled over? - -Income taxes plus a 10% penalty
tax on $30,000
- For insurance purposes, similar objects which are exposed to the same
perils are referred to as - -Homogeneous exposure units
- In an individual retirement account (IRA), rollover contributions are - -Not
limited by dollar amount
- What is the maximum number of employees (earning at least $5,000) that
an employer can have in order to start a SIMPLE retirement plan? - -100
- Which statement concerning a decreasing term life policy is accurate? - -
Face amount decreases over time
- All of these are considered features of whole life insurance EXCEPT - -
Initial premium is lower than for an equivalent amount of term insurance
- An employer that offers a qualified retirement plan to its employees is
eligible to - -Make tax-deductible contributions to the plan
- The insurance coverage in a variable life insurance policy may fluctuate
based on the value of - -Its underlying investments
- How long is a person covered for under a limited pay whole life policy? - -
Until age 100
- When does an insured stop making payments under a thirty-payment
whole life policy? - -When the insured dies or 30 years from the policy's
inception, whichever comes first
- What does a fixed life annuity offer protection against? - -Savings
depletion because of longevity
- When does interest income in a deferred annuity get reported for federal
income taxes? - -When the distributions are received
- Which statement regarding the cash value of a whole life insurance policy
is correct? - -Payable to the policy owner when policy has been surrendered
