Indiana Life Insurance Exam Questions and Answers |Complete Solutions
Graded A+ |100% Correct
A Multiple Indemnity rider does which of the following?
a. Waives the premium on the policy if the insured should become disabled.
b. Pays an amount in addition to the death benefit if the insured dies in an accident.
c. Pays an equal amount to a multiple number of beneficiaries.
d. Pays an amount in addition to the death benefit if the insured dies before age 60 or 65.
Pays an amount in addition to the death benefit if the insured dies in an accident.
An individual buys a Family Income policy with a 10 year Decreasing Term element. If the
individual dies 12 years after purchasing the policy, his beneficiary will receive
a. The death benefit provided by the Whole Life portion of the policy.
b. Periodic payments from the Decreasing Term portion followed by a lump sum payment from
the Whole Life portion.
c. One-half of the Whole Life death benefit.
d. Nothing The death benefit provided by the Whole Life portion
Jumping Juvenile is
a. A hyperactive condition.
b. A Life insurance policy designed for adolescents who participate in track and field events.
c. A Life insurance policy whose face amount jumps five times when the insured reaches a
certain age, such as age 21.
d. A Life insurance policy whose premium jumps five times when the insured reaches a certain
age, such as age 21. A life insurance policy whose face amount jumps five times when the
insured reaches a certain age, such as 21.
,With Graded Premium Whole Life, the premium
a. Is guaranteed to remain level throughout the life of the policy.
b. Will decrease.
c. Will be waived for the first five years of coverage.
d. Will increase Will Increase (Think stair-steps)
A Family policy is constructed using what two kinds of Life insurance products?
a. Whole Life and Decreasing Term
b. Convertible Term and Decreasing Term
c. Whole Life and Level Term
d. Whole Life and Convertible Term Whole Life & Convertible Term
When will the death benefit of a Joint Life policy be paid?
a. When all insureds have died
b. When the second insured dies
c. When the first insured dies
d. When all the even numbered insureds die When the first insured dies
If you purchase an IRA with pre-tax dollars, it means that
a. Only the growth will be taxed on payout.
b. All money paid out will be subject to tax.
c. You will not be taxed during the payout period.
,d. You can only be taxed on a maximum of $2000 per year. All money paid out will be
subject to tax
If you are able to purchase an IRA with pre-tax dollars, you are either not in another Qualified
Pension Plan, or you are in a Qualified Pension Plan and are earning a low to medium income.
Since none of the money in your IRA was ever taxed, it will ALL be taxed as income when you
withdraw the money.
What are the Federal income tax implications of a Buy-Sell agreement funded by Life
insurance?
a. The premiums are tax deductible; the proceeds are not taxed.
b. The premiums are not tax deductible; the proceeds are not taxed.
c. The premiums are not tax deductible; the proceeds are taxed.
d. The premiums are tax deductible; the proceeds are taxed. The premiums are not tax
deductible; the proceeds are not taxed
The IRS's opinion is that if a business is going to get a tax-free death benefit, then the business
is not entitled to also deduct the premium payments as a before-tax business expense.
Two types of corporate pension plans are
a. Defined investment and defined growth.
b. Defined growth and defined contribution.
c. Defined benefit and defined investment.
d. Defined benefit and defined contribution. Defined Benefit and Defined Contribution
In the Defined Contribution plan, the amount set aside per employee per years is defined
(stated), i.e. the contribution is defined. In the Defined Benefit Plan, how much a retired person
will receive in benefits each month is defined.
, A Keogh plan would allow an annual contribution of up to
a. 20 percent of total earned income.
b. 10 percent of total earned income.
c. 15 percent of total earned income.
d. 30 percent of total earned income. 20% of total earned income
Maximum annual contributions are limited to the lesser of $30,000 or 20 percent of total
earned income (25% of the after-contribution income).
To whom is the death benefit paid in a Key Employee Life Insurance policy?
a. The estate of the employee
b. The employee
c. Any beneficiary the employee names
d. The employer The Employer
It is paid to the employer because he/she is the policyowner.
Which of the following is NOT a requirement of a Qualified Retirement Plan?
a. The Plan must be formalized in writing.
b. The Plan must be for the exclusive benefit of employees or their beneficiaries.
c. The Plan must always invest funds in government-held bonds.
d. The Plan must not discriminate in favor of highly paid employees. The plan must always
invest funds in government held bonds
Graded A+ |100% Correct
A Multiple Indemnity rider does which of the following?
a. Waives the premium on the policy if the insured should become disabled.
b. Pays an amount in addition to the death benefit if the insured dies in an accident.
c. Pays an equal amount to a multiple number of beneficiaries.
d. Pays an amount in addition to the death benefit if the insured dies before age 60 or 65.
Pays an amount in addition to the death benefit if the insured dies in an accident.
An individual buys a Family Income policy with a 10 year Decreasing Term element. If the
individual dies 12 years after purchasing the policy, his beneficiary will receive
a. The death benefit provided by the Whole Life portion of the policy.
b. Periodic payments from the Decreasing Term portion followed by a lump sum payment from
the Whole Life portion.
c. One-half of the Whole Life death benefit.
d. Nothing The death benefit provided by the Whole Life portion
Jumping Juvenile is
a. A hyperactive condition.
b. A Life insurance policy designed for adolescents who participate in track and field events.
c. A Life insurance policy whose face amount jumps five times when the insured reaches a
certain age, such as age 21.
d. A Life insurance policy whose premium jumps five times when the insured reaches a certain
age, such as age 21. A life insurance policy whose face amount jumps five times when the
insured reaches a certain age, such as 21.
,With Graded Premium Whole Life, the premium
a. Is guaranteed to remain level throughout the life of the policy.
b. Will decrease.
c. Will be waived for the first five years of coverage.
d. Will increase Will Increase (Think stair-steps)
A Family policy is constructed using what two kinds of Life insurance products?
a. Whole Life and Decreasing Term
b. Convertible Term and Decreasing Term
c. Whole Life and Level Term
d. Whole Life and Convertible Term Whole Life & Convertible Term
When will the death benefit of a Joint Life policy be paid?
a. When all insureds have died
b. When the second insured dies
c. When the first insured dies
d. When all the even numbered insureds die When the first insured dies
If you purchase an IRA with pre-tax dollars, it means that
a. Only the growth will be taxed on payout.
b. All money paid out will be subject to tax.
c. You will not be taxed during the payout period.
,d. You can only be taxed on a maximum of $2000 per year. All money paid out will be
subject to tax
If you are able to purchase an IRA with pre-tax dollars, you are either not in another Qualified
Pension Plan, or you are in a Qualified Pension Plan and are earning a low to medium income.
Since none of the money in your IRA was ever taxed, it will ALL be taxed as income when you
withdraw the money.
What are the Federal income tax implications of a Buy-Sell agreement funded by Life
insurance?
a. The premiums are tax deductible; the proceeds are not taxed.
b. The premiums are not tax deductible; the proceeds are not taxed.
c. The premiums are not tax deductible; the proceeds are taxed.
d. The premiums are tax deductible; the proceeds are taxed. The premiums are not tax
deductible; the proceeds are not taxed
The IRS's opinion is that if a business is going to get a tax-free death benefit, then the business
is not entitled to also deduct the premium payments as a before-tax business expense.
Two types of corporate pension plans are
a. Defined investment and defined growth.
b. Defined growth and defined contribution.
c. Defined benefit and defined investment.
d. Defined benefit and defined contribution. Defined Benefit and Defined Contribution
In the Defined Contribution plan, the amount set aside per employee per years is defined
(stated), i.e. the contribution is defined. In the Defined Benefit Plan, how much a retired person
will receive in benefits each month is defined.
, A Keogh plan would allow an annual contribution of up to
a. 20 percent of total earned income.
b. 10 percent of total earned income.
c. 15 percent of total earned income.
d. 30 percent of total earned income. 20% of total earned income
Maximum annual contributions are limited to the lesser of $30,000 or 20 percent of total
earned income (25% of the after-contribution income).
To whom is the death benefit paid in a Key Employee Life Insurance policy?
a. The estate of the employee
b. The employee
c. Any beneficiary the employee names
d. The employer The Employer
It is paid to the employer because he/she is the policyowner.
Which of the following is NOT a requirement of a Qualified Retirement Plan?
a. The Plan must be formalized in writing.
b. The Plan must be for the exclusive benefit of employees or their beneficiaries.
c. The Plan must always invest funds in government-held bonds.
d. The Plan must not discriminate in favor of highly paid employees. The plan must always
invest funds in government held bonds
