Life Insurance and Annuity Concepts Exam Questions With
Accurate Answers.
Material Change - accurate answers-On a Modified Endowment Contract
(MEC), what the IRS considers as a significant alteration.
1035 Exchange - accurate answers-An annuitant's choice to switch to another
policy with the same insurer for potentially better interest rates.
Survivorship Life Insurance - accurate answers-Pays benefits upon the first
death of the insured.
Proceeds Handling - accurate answers-If an annuitant dies during the
accumulation period of a deferred annuity, the amount is taxable to the
beneficiary exceeding the cost basis.
Immediate Annuity - accurate answers-An annuity purchased with a lump
sum, not installment payments.
Pure Life Annuity - accurate answers-Another term for a life income annuity.
Cross-Purchase Plan - accurate answers-Life insurance used to fund a small
partnership buy/sell agreement.
Equity Indexed Annuities (EIAs) - accurate answers-Do not have purchasing
power risk.
Level Term Insurance - accurate answers-Typically added as a rider to cover a
child under a policy.
, Life Insurance Policy Dividends - accurate answers-Classified as a return of a
premium overcharge.
Modified Whole Life Insurance - accurate answers-Does not allow changes in
death benefits.
IRA for Children - accurate answers-Consider alternative investments since
IRAs require earnings.
Keogh Plans - accurate answers-Qualified for self-employed individuals and
partners.
Highest Mortality Rate - accurate answers-Among the options, a 60-year-old
male has the highest mortality rate.
Cash Surrender on Annuity - accurate answers-Requires the owner's
permission to take.
403B TSA Contributions - accurate answers-Can also make non-deductible
contributions to a ROTH IRA up to specified limits.
Accelerated Benefits - accurate answers-Life insurance benefit payable while
the insured is still alive.
Needs Approach - accurate answers-In selling life insurance, helps determine
how much coverage is necessary to cover final expenses.
Accurate Answers.
Material Change - accurate answers-On a Modified Endowment Contract
(MEC), what the IRS considers as a significant alteration.
1035 Exchange - accurate answers-An annuitant's choice to switch to another
policy with the same insurer for potentially better interest rates.
Survivorship Life Insurance - accurate answers-Pays benefits upon the first
death of the insured.
Proceeds Handling - accurate answers-If an annuitant dies during the
accumulation period of a deferred annuity, the amount is taxable to the
beneficiary exceeding the cost basis.
Immediate Annuity - accurate answers-An annuity purchased with a lump
sum, not installment payments.
Pure Life Annuity - accurate answers-Another term for a life income annuity.
Cross-Purchase Plan - accurate answers-Life insurance used to fund a small
partnership buy/sell agreement.
Equity Indexed Annuities (EIAs) - accurate answers-Do not have purchasing
power risk.
Level Term Insurance - accurate answers-Typically added as a rider to cover a
child under a policy.
, Life Insurance Policy Dividends - accurate answers-Classified as a return of a
premium overcharge.
Modified Whole Life Insurance - accurate answers-Does not allow changes in
death benefits.
IRA for Children - accurate answers-Consider alternative investments since
IRAs require earnings.
Keogh Plans - accurate answers-Qualified for self-employed individuals and
partners.
Highest Mortality Rate - accurate answers-Among the options, a 60-year-old
male has the highest mortality rate.
Cash Surrender on Annuity - accurate answers-Requires the owner's
permission to take.
403B TSA Contributions - accurate answers-Can also make non-deductible
contributions to a ROTH IRA up to specified limits.
Accelerated Benefits - accurate answers-Life insurance benefit payable while
the insured is still alive.
Needs Approach - accurate answers-In selling life insurance, helps determine
how much coverage is necessary to cover final expenses.
