1135 Life & Health Insurance Exam with all Correct &
100% Verified Answers|2025/2026 Latest Update|
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Which of these must be disclosed in a company's universal life policy?i ✔Correct Answer--The
policy's surrender charges
Which type of life insurance typically offers mortgage protection? ✔Correct Answer--Decreasing
term
Dividends from a mutual insurance company are paid to whom? ✔Correct Answer--Policyowners
These are all accurate statements regarding universal life insurance EXCEPT ✔Correct Answer--
Policy loans are not permitted
Which of these is NOT a reason for a business to buy key person life insurance? ✔Correct Answer--
A pension deficiency if the key employee dies
Which of these do NOT indicate the presence of insurable interest in a life insurance contract?
✔Correct Answer--Lifelong friendship
Which of these statements is true regarding an adjustable life insurance policy? ✔Correct Answer--
Policyowners are given the option of alternating between forms of term and whole life insurance
Which of these is NOT relevant when determining the amount of personal life insurance needed?
✔Correct Answer--Local unemployment rate
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency
contract, but nothing is stated regarding the collection of premiums. Which authority grants the
producer the right to collect premiums? ✔Correct Answer--Implied
What kind of life insurance policy allows the policyowner the choice of investments along with
adjustable premiums? ✔Correct Answer--Variable universal life
In life insurance, the needs approach is used mostly to establish ✔Correct Answer--how much life
insurance a client should apply for
Which statement concerning adjustable life insurance is accurate? ✔Correct Answer--The face
amount and premiums can be changed simultaneously by the policyowner
In what way are insurance policies said to be aleatory? ✔Correct Answer--Involves the potential for
the unequal exchange of value
Which statement concerning an adjustable life insurance policy is FALSE? ✔Correct Answer--
Evidence of insurability is always necessary when there is a change in premium
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
✔Correct Answer--None
,How does the cost for a survivorship life policy compare to the cost of combining two separate life
insurance policies? ✔Correct Answer--Survivorship life policy is lower
In a qualified retirement plan, the yearly contributions to an employee's account ✔Correct
Answer--are restricted to maximum levels set by the IRS
An insurance company can be liable for a producer's unauthorized acts ✔Correct Answer--when
the agency contract is vague concerning the authority given
An individual participant personally received eligible rollover funds from a profit-sharing plan. What
is the income tax withholding requirements for this transaction? ✔Correct Answer--20% is
withheld for income taxes
What minimum percentage of all eligible employees must participate in a group life insurance plan if
the premiums are completely paid for by the employer? ✔Correct Answer--100%
All of these are considered features of whole life insurance EXCEPT ✔Correct Answer--Initial cost is
lower than for an equivalent amount of term insurance
In an individual retirement account (IRA), rollover contributions are ✔Correct Answer--not limited
by dollar amount
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated for
federal income tax purposes? ✔Correct Answer--The gain is added to his gross income and a
penalty tax is assessed on the gain
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
✔Correct Answer--Ordinary income tax and a 10% tax penalty for early withdrawal
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what
is the maximum deductible IRA contribution allowable? ✔Correct Answer--$25,000
The insurance coverage in a variable life insurance policy may fluctuate according to ✔Correct
Answer--its underlying investments
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded
the balance of the IRA. The widow qualifies for the ✔Correct Answer--marital deduction
An employer that offers a qualified retirement plan to its employees is eligible to ✔Correct
Answer--make tax-deductible contributions to the plan
What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years
old? ✔Correct Answer--Less than the policy's face amount
Which statement regarding the cash value of a whole life insurance policy is correct? ✔Correct
Answer--Available to the policyowner when policy has been surrendered
Which of these factors do NOT affect life insurance premium rates? ✔Correct Answer--An insurer's
rating
, Which life insurance settlement option pays lifetime benefits to two or more people? ✔Correct
Answer--Joint and survivor
Which would be described as a beneficiary designation by class? ✔Correct Answer--Children of the
insured
Which of these pays an income to two or more annuitants until the death of the last annuitant?
✔Correct Answer--Joint and survivor annuity
The contract owner in a single premium deferred annuity (SPDA) ✔Correct Answer--makes only
one premium payment
During an annuity's liquidation phase, the annuitant normally ✔Correct Answer--receives benefit
payments at regular intervals
Kim has a life insurance policy which insures all the members of her family. The benefit supplement
attached to a life insurance policy which insures all members of a family is called a ✔Correct
Answer--Family term rider
An annuity owner has a life annuity which provides benefit payments for a minimum number of
years, regardless of when the annuitant dies. The contract feature of this annuity is called
✔Correct Answer--period certain
A source of supplemental income for a life insurance policyowner can be derived from the policy's
✔Correct Answer--cash value
Which of these is an accurate statement regarding a fixed period settlement option on a life
insurance policy? ✔Correct Answer--A portion of the payments paid to the beneficiary stems from
interest generated from the proceeds
The beneficiary of a life insurance policy is normally chosen by whom? ✔Correct Answer--
Policyowner
A life insurance policy that includes a return of premium rider will pay how much upon the insured's
death? ✔Correct Answer--Face amount plus total premiums paid
Which report contains information regarding an individual's general reputation and credit standing?
✔Correct Answer--Consumer report
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)? ✔Correct Answer--
Annual investment gains are included in participant's gross income
The interest rate credited to a fixed annuity does not fall below the ✔Correct Answer--contract
guaranteed rate
Which of these is NOT considered the responsibility of a producer in the underwriting process?
✔Correct Answer--Choosing the final approval date
The automatic premium loan provision can be accurately described as a ✔Correct Answer--
provision that authorizes a policy loan to pay an overdue premium at the end of the grace period
100% Verified Answers|2025/2026 Latest Update|
Already Graded A+
Which of these must be disclosed in a company's universal life policy?i ✔Correct Answer--The
policy's surrender charges
Which type of life insurance typically offers mortgage protection? ✔Correct Answer--Decreasing
term
Dividends from a mutual insurance company are paid to whom? ✔Correct Answer--Policyowners
These are all accurate statements regarding universal life insurance EXCEPT ✔Correct Answer--
Policy loans are not permitted
Which of these is NOT a reason for a business to buy key person life insurance? ✔Correct Answer--
A pension deficiency if the key employee dies
Which of these do NOT indicate the presence of insurable interest in a life insurance contract?
✔Correct Answer--Lifelong friendship
Which of these statements is true regarding an adjustable life insurance policy? ✔Correct Answer--
Policyowners are given the option of alternating between forms of term and whole life insurance
Which of these is NOT relevant when determining the amount of personal life insurance needed?
✔Correct Answer--Local unemployment rate
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency
contract, but nothing is stated regarding the collection of premiums. Which authority grants the
producer the right to collect premiums? ✔Correct Answer--Implied
What kind of life insurance policy allows the policyowner the choice of investments along with
adjustable premiums? ✔Correct Answer--Variable universal life
In life insurance, the needs approach is used mostly to establish ✔Correct Answer--how much life
insurance a client should apply for
Which statement concerning adjustable life insurance is accurate? ✔Correct Answer--The face
amount and premiums can be changed simultaneously by the policyowner
In what way are insurance policies said to be aleatory? ✔Correct Answer--Involves the potential for
the unequal exchange of value
Which statement concerning an adjustable life insurance policy is FALSE? ✔Correct Answer--
Evidence of insurability is always necessary when there is a change in premium
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
✔Correct Answer--None
,How does the cost for a survivorship life policy compare to the cost of combining two separate life
insurance policies? ✔Correct Answer--Survivorship life policy is lower
In a qualified retirement plan, the yearly contributions to an employee's account ✔Correct
Answer--are restricted to maximum levels set by the IRS
An insurance company can be liable for a producer's unauthorized acts ✔Correct Answer--when
the agency contract is vague concerning the authority given
An individual participant personally received eligible rollover funds from a profit-sharing plan. What
is the income tax withholding requirements for this transaction? ✔Correct Answer--20% is
withheld for income taxes
What minimum percentage of all eligible employees must participate in a group life insurance plan if
the premiums are completely paid for by the employer? ✔Correct Answer--100%
All of these are considered features of whole life insurance EXCEPT ✔Correct Answer--Initial cost is
lower than for an equivalent amount of term insurance
In an individual retirement account (IRA), rollover contributions are ✔Correct Answer--not limited
by dollar amount
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated for
federal income tax purposes? ✔Correct Answer--The gain is added to his gross income and a
penalty tax is assessed on the gain
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
✔Correct Answer--Ordinary income tax and a 10% tax penalty for early withdrawal
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what
is the maximum deductible IRA contribution allowable? ✔Correct Answer--$25,000
The insurance coverage in a variable life insurance policy may fluctuate according to ✔Correct
Answer--its underlying investments
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded
the balance of the IRA. The widow qualifies for the ✔Correct Answer--marital deduction
An employer that offers a qualified retirement plan to its employees is eligible to ✔Correct
Answer--make tax-deductible contributions to the plan
What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years
old? ✔Correct Answer--Less than the policy's face amount
Which statement regarding the cash value of a whole life insurance policy is correct? ✔Correct
Answer--Available to the policyowner when policy has been surrendered
Which of these factors do NOT affect life insurance premium rates? ✔Correct Answer--An insurer's
rating
, Which life insurance settlement option pays lifetime benefits to two or more people? ✔Correct
Answer--Joint and survivor
Which would be described as a beneficiary designation by class? ✔Correct Answer--Children of the
insured
Which of these pays an income to two or more annuitants until the death of the last annuitant?
✔Correct Answer--Joint and survivor annuity
The contract owner in a single premium deferred annuity (SPDA) ✔Correct Answer--makes only
one premium payment
During an annuity's liquidation phase, the annuitant normally ✔Correct Answer--receives benefit
payments at regular intervals
Kim has a life insurance policy which insures all the members of her family. The benefit supplement
attached to a life insurance policy which insures all members of a family is called a ✔Correct
Answer--Family term rider
An annuity owner has a life annuity which provides benefit payments for a minimum number of
years, regardless of when the annuitant dies. The contract feature of this annuity is called
✔Correct Answer--period certain
A source of supplemental income for a life insurance policyowner can be derived from the policy's
✔Correct Answer--cash value
Which of these is an accurate statement regarding a fixed period settlement option on a life
insurance policy? ✔Correct Answer--A portion of the payments paid to the beneficiary stems from
interest generated from the proceeds
The beneficiary of a life insurance policy is normally chosen by whom? ✔Correct Answer--
Policyowner
A life insurance policy that includes a return of premium rider will pay how much upon the insured's
death? ✔Correct Answer--Face amount plus total premiums paid
Which report contains information regarding an individual's general reputation and credit standing?
✔Correct Answer--Consumer report
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)? ✔Correct Answer--
Annual investment gains are included in participant's gross income
The interest rate credited to a fixed annuity does not fall below the ✔Correct Answer--contract
guaranteed rate
Which of these is NOT considered the responsibility of a producer in the underwriting process?
✔Correct Answer--Choosing the final approval date
The automatic premium loan provision can be accurately described as a ✔Correct Answer--
provision that authorizes a policy loan to pay an overdue premium at the end of the grace period
