NEVADA LIFE AND HEALTH UPDATED
COMPREHESNIVE EXAM QUESTIONS AND
ANSWERS SURE A+
✔✔In the fixed-period settlement option, how will the number of installments for the
death benefit proceeds determine the amount of the installments? - ✔✔The longer the
period selected, the smaller each installment will be
✔✔What nonforfeiture option has the highest amount of insurance protection? -
✔✔Extended Term
✔✔If a life insurance policy has an irrevocable beneficiary designation - ✔✔The
beneficiary can old be changed with written permission of the beneficiary
✔✔What is the purpose of a free-look period in insurance policies? - ✔✔It allows the
insured to reject the policy with a full refund
✔✔What is the clause that is included in a life policy that limits or eliminates the death
benefit if the insured dies as a result of war or while serving in the military? - ✔✔Military
Service or War
✔✔An insured receives an annual life insurance dividend check. What term best
described this arrangement? - ✔✔Cash option
✔✔Nonforfeiture values guarantee what for the policyowner? - ✔✔That the cash value
will not be lost
✔✔What required provision protects against unintentional lapse of the policy? -
✔✔Grace period
✔✔What are the benefits available under Social Security? - ✔✔Disability benefits, death
benefits, survivor's benefits, and old-age and retirement benefits
,✔✔Group life insurance policies are written as what type of life insurance? -
✔✔Annually Renewable Term
✔✔What are the personal uses of life insurance? - ✔✔Survivor protection, estate
creation and conservation, cash accumulation and liquidity
✔✔Who qualifies for tax-sheltered annuities, or 403(b) plans? - ✔✔Employees of
nonprofit organizations under Section 501(c)(3) and employees of public school
systems
✔✔What is the general taxation rule for death benefits payable to the beneficiary of a
life insurance policy? - ✔✔Death benefits are generally not subject to income taxes
✔✔Upon surrender of a life insurance policy, what portion of the cash value will be
taxed? - ✔✔Only the portion in excess of the premium paid
✔✔What is the main advantage of converting from group life insurance to individual
coverage? - ✔✔Evidence of insurability is not required
✔✔What is the primary purpose of a 401(k) plan? - ✔✔Provide retirement income
✔✔Is the death benefit of a life insurance policy taxed to the beneficiary if it's received
as a lump sum? - ✔✔No, lump-sum benefits are received tax free
✔✔What are the characteristics of the group that underwriters will consider before
issuing a group life policy? - ✔✔Group's purpose, size, financial strength, and turnover
✔✔What is the main purpose of the 7-Pay Test? - ✔✔To determine if a life insurance
policy a Modified Endowment Contract (MEC)
✔✔If the beneficiary of a life insurance policy receives death benefit payments that
consist of principal and interest, which portion, if any, will be taxed? - ✔✔The interest
payment will be taxed.
✔✔What does it mean when a retirement plan is qualified? - ✔✔The plan has favorable
tax treatment
✔✔Who may contribute to an HR-10 plan? - ✔✔A self-employed individual
✔✔Who would be considered a third - ✔✔An individual or an entity who is not the
insured
, ✔✔What does liquidity mean in a life insurance policy? - ✔✔Availability of cash value
✔✔What is required to qualify an individual to contribute to a traditional IRA? -
✔✔Earned income
✔✔When would life insurance policy proceeds be included in the insured's taxable
estate? - ✔✔When there is an incident of ownership at the time of death
✔✔What type of policy is typically issued without proof of insurability from the insured? -
✔✔Group policy
✔✔SIMPLE plans are available to groups of how many employees? - ✔✔No more than
100
✔✔Why are dividends in life insurance policies not taxable? - ✔✔They are a return of
unused premiums and are not considered income for tax purposes
✔✔What type of worker would not qualify for Keogh Plan? - ✔✔A worker who works
less than 1,000 hours per year
✔✔The premiums paid by the employer in a business life insurance policy are - ✔✔Tax
deductible by the employer
✔✔When an employee terminates coverage under a group insurance policy, how long
does the coverage stay in force? - ✔✔31 days
✔✔How are contributions to a tax-sheltered annuity treated with regards to taxation? -
✔✔They are not included as income for the employee, but are taxable upon distribution
✔✔What type of insurance policies would perform the function of cash accumulation? -
✔✔Whole Life Insurance
✔✔In a life settlement contract, whom does the life settlement broker represent? -
✔✔The owner of the policy
✔✔What is true regarding a nonqualified retirement plan? - ✔✔Contributions are not tax
deductible, It can discriminate in benefits and selecting participants, earnings grow tax
deferred and it does not need IRS approval
✔✔What document describes an insured's medical history, including diagnosis and
treatments? - ✔✔Attending Physician's Statement
COMPREHESNIVE EXAM QUESTIONS AND
ANSWERS SURE A+
✔✔In the fixed-period settlement option, how will the number of installments for the
death benefit proceeds determine the amount of the installments? - ✔✔The longer the
period selected, the smaller each installment will be
✔✔What nonforfeiture option has the highest amount of insurance protection? -
✔✔Extended Term
✔✔If a life insurance policy has an irrevocable beneficiary designation - ✔✔The
beneficiary can old be changed with written permission of the beneficiary
✔✔What is the purpose of a free-look period in insurance policies? - ✔✔It allows the
insured to reject the policy with a full refund
✔✔What is the clause that is included in a life policy that limits or eliminates the death
benefit if the insured dies as a result of war or while serving in the military? - ✔✔Military
Service or War
✔✔An insured receives an annual life insurance dividend check. What term best
described this arrangement? - ✔✔Cash option
✔✔Nonforfeiture values guarantee what for the policyowner? - ✔✔That the cash value
will not be lost
✔✔What required provision protects against unintentional lapse of the policy? -
✔✔Grace period
✔✔What are the benefits available under Social Security? - ✔✔Disability benefits, death
benefits, survivor's benefits, and old-age and retirement benefits
,✔✔Group life insurance policies are written as what type of life insurance? -
✔✔Annually Renewable Term
✔✔What are the personal uses of life insurance? - ✔✔Survivor protection, estate
creation and conservation, cash accumulation and liquidity
✔✔Who qualifies for tax-sheltered annuities, or 403(b) plans? - ✔✔Employees of
nonprofit organizations under Section 501(c)(3) and employees of public school
systems
✔✔What is the general taxation rule for death benefits payable to the beneficiary of a
life insurance policy? - ✔✔Death benefits are generally not subject to income taxes
✔✔Upon surrender of a life insurance policy, what portion of the cash value will be
taxed? - ✔✔Only the portion in excess of the premium paid
✔✔What is the main advantage of converting from group life insurance to individual
coverage? - ✔✔Evidence of insurability is not required
✔✔What is the primary purpose of a 401(k) plan? - ✔✔Provide retirement income
✔✔Is the death benefit of a life insurance policy taxed to the beneficiary if it's received
as a lump sum? - ✔✔No, lump-sum benefits are received tax free
✔✔What are the characteristics of the group that underwriters will consider before
issuing a group life policy? - ✔✔Group's purpose, size, financial strength, and turnover
✔✔What is the main purpose of the 7-Pay Test? - ✔✔To determine if a life insurance
policy a Modified Endowment Contract (MEC)
✔✔If the beneficiary of a life insurance policy receives death benefit payments that
consist of principal and interest, which portion, if any, will be taxed? - ✔✔The interest
payment will be taxed.
✔✔What does it mean when a retirement plan is qualified? - ✔✔The plan has favorable
tax treatment
✔✔Who may contribute to an HR-10 plan? - ✔✔A self-employed individual
✔✔Who would be considered a third - ✔✔An individual or an entity who is not the
insured
, ✔✔What does liquidity mean in a life insurance policy? - ✔✔Availability of cash value
✔✔What is required to qualify an individual to contribute to a traditional IRA? -
✔✔Earned income
✔✔When would life insurance policy proceeds be included in the insured's taxable
estate? - ✔✔When there is an incident of ownership at the time of death
✔✔What type of policy is typically issued without proof of insurability from the insured? -
✔✔Group policy
✔✔SIMPLE plans are available to groups of how many employees? - ✔✔No more than
100
✔✔Why are dividends in life insurance policies not taxable? - ✔✔They are a return of
unused premiums and are not considered income for tax purposes
✔✔What type of worker would not qualify for Keogh Plan? - ✔✔A worker who works
less than 1,000 hours per year
✔✔The premiums paid by the employer in a business life insurance policy are - ✔✔Tax
deductible by the employer
✔✔When an employee terminates coverage under a group insurance policy, how long
does the coverage stay in force? - ✔✔31 days
✔✔How are contributions to a tax-sheltered annuity treated with regards to taxation? -
✔✔They are not included as income for the employee, but are taxable upon distribution
✔✔What type of insurance policies would perform the function of cash accumulation? -
✔✔Whole Life Insurance
✔✔In a life settlement contract, whom does the life settlement broker represent? -
✔✔The owner of the policy
✔✔What is true regarding a nonqualified retirement plan? - ✔✔Contributions are not tax
deductible, It can discriminate in benefits and selecting participants, earnings grow tax
deferred and it does not need IRS approval
✔✔What document describes an insured's medical history, including diagnosis and
treatments? - ✔✔Attending Physician's Statement
