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Kentucky Life Insurance State Exam
Practice Questions with Detailed Verified
Answers (100% Correct Answers) /Already
Graded A+
The premiums paid by an employer for his employee's group life insurance are usually considered to
be
Ans: Tax-deductible to the employer
Which of these is NOT considered to be a cost connected with an individual's death?
Ans: Business expenses
These are all accurate statements regarding universal life insurance EXCEPT
Ans: Policy loans are not permitted
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Ans: Local unemployment rate
Who elects the governing body of a mutual insurance company?
Ans: Policyholders
Why would evidence of insurability be required for a person insured with a variable universal life
policy?
Ans: The face amount is increased
At what point are death proceeds paid in a joint life policy?
Ans: When the first insured dies
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Ans: Fund a buy-sell agreement
Which action will trigger a penalty tax on premature distributions from a modified endowment
contract (MEC)?
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Ans: Policy loans
Dividends from a mutual insurance company are paid to whom?
Ans: Policyowners
Traditional individual retirement annuity (IRA) distributions must start by
Ans: April 1st of the year following the year the participant attains age 70 1/2
How are Roth IRA distributions normally taxed?
Ans: Distributions are received tax-free
How can an insurance company minimize exposure to loss?
Ans: Reinsurance
All of the following statements about traditional individual retirement accounts are false EXCEPT
Ans: 10% penalty is applied to withdrawals before age 59 1/2
All of these statements concerning universal life insurance are false EXCEPT
Ans: 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?
Ans: 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
Ans: Homogeneous exposure units
In an individual retirement account (IRA), rollover contributions are
Ans: 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?
Ans: 100
Which statement concerning a decreasing term life policy is accurate?
Ans: Face amount decreases over time
All of these are considered features of whole life insurance EXCEPT
Kentucky Life Insurance State Exam
Practice Questions with Detailed Verified
Answers (100% Correct Answers) /Already
Graded A+
The premiums paid by an employer for his employee's group life insurance are usually considered to
be
Ans: Tax-deductible to the employer
Which of these is NOT considered to be a cost connected with an individual's death?
Ans: Business expenses
These are all accurate statements regarding universal life insurance EXCEPT
Ans: Policy loans are not permitted
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Ans: Local unemployment rate
Who elects the governing body of a mutual insurance company?
Ans: Policyholders
Why would evidence of insurability be required for a person insured with a variable universal life
policy?
Ans: The face amount is increased
At what point are death proceeds paid in a joint life policy?
Ans: When the first insured dies
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Ans: Fund a buy-sell agreement
Which action will trigger a penalty tax on premature distributions from a modified endowment
contract (MEC)?
, Page |2
Ans: Policy loans
Dividends from a mutual insurance company are paid to whom?
Ans: Policyowners
Traditional individual retirement annuity (IRA) distributions must start by
Ans: April 1st of the year following the year the participant attains age 70 1/2
How are Roth IRA distributions normally taxed?
Ans: Distributions are received tax-free
How can an insurance company minimize exposure to loss?
Ans: Reinsurance
All of the following statements about traditional individual retirement accounts are false EXCEPT
Ans: 10% penalty is applied to withdrawals before age 59 1/2
All of these statements concerning universal life insurance are false EXCEPT
Ans: 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?
Ans: 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
Ans: Homogeneous exposure units
In an individual retirement account (IRA), rollover contributions are
Ans: 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?
Ans: 100
Which statement concerning a decreasing term life policy is accurate?
Ans: Face amount decreases over time
All of these are considered features of whole life insurance EXCEPT
