KENTUCKY LIFE INSURANCE EXAM PREP|
QUESTIONS AND VERIFIED ANSWERS| 100 %
CORRECT| GRADE A (LATEST 2024/ 2025 UPDATE)
"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? - CORRECT
ANSWER=> Income taxes plus a 10% penalty tax on $30,000"
"An employee quits her job where she has a balance of $10,000 in qualified plan. If she decides to
rollover her plan to a Traditional IRA, how much will she receive from the plan administrator, and how
long does she have to complete the tax-free rollover? - CORRECT ANSWER=> $8,000; 60 days"
"The insurance coverage in a variable life insurance policy may fluctuate based on the value of -
CORRECT ANSWER=> Its underlying investments"
"In an individual retirement account (IRA), rollover contributions are - CORRECT ANSWER=> Not
limited by dollar amount"
"Who elects the governing body of a mutual insurance company? - CORRECT ANSWER=>
Policyholders"
“The premiums paid by an employer for his employee's group life insurance are usually considered to be
- CORRECT ANSWER=> Tax-deductible to the employer"
"Which of these is NOT considered to be a cost connected with an individual's death? - CORRECT
ANSWER=> Business expenses"
"For insurance purposes, similar objects which are exposed to the same perils are referred to as -
CORRECT ANSWER=> Homogeneous exposure units"
"These are all accurate statements regarding universal life insurance EXCEPT - CORRECT ANSWER=>
Policy loans are not permitted"
"Which of these is NOT relevant when determining the amount of personal life insurance needed? -
CORRECT ANSWER=> Local unemployment rate"
"Why would evidence of insurability be required for a person insured with a variable universal life
policy? - CORRECT ANSWER=> The face amount is increased"
, "At what point are death proceeds paid in a joint life policy? - CORRECT ANSWER=> When the first
insured dies"
"What is considered a valid reason for small businesses to insure the lives of its major shareholders? -
CORRECT ANSWER=> Fund a buy-sell agreement"
"Which action will trigger a penalty tax on premature distributions from a modified endowment contract
(MEC)? - CORRECT ANSWER=> Policy loans"
"Dividends from a mutual insurance company are paid to whom? - CORRECT ANSWER=> Policyowners"
"Traditional individual retirement annuity (IRA) distributions must start by - CORRECT ANSWER=> April
1st of the year following the year the participant attains age 70 1/2"
"How are Roth IRA distributions normally taxed? - CORRECT ANSWER=> Distributions are received tax-
free"
"How can an insurance company minimize exposure to loss? - CORRECT ANSWER=> Reinsurance"
"All of the following statements about traditional individual retirement accounts are false EXCEPT -
CORRECT ANSWER=> 10% penalty is applied to withdrawals before age 59 1/2"
"All of these statements concerning universal life insurance are false EXCEPT - CORRECT ANSWER=>
Policy indicates how much of the premium is used toward company expenses"
"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? - CORRECT ANSWER=> 100"
"Which statement concerning a decreasing term life policy is accurate? - CORRECT ANSWER=> Face
amount decreases over time"
"An employer that offers a qualified retirement plan to its employees is eligible to - CORRECT
ANSWER=> Make tax-deductible contributions to the plan"
"How long is a person covered for under a limited pay whole life policy? - CORRECT ANSWER=> Until
age 100"
"When does an insured stop making payments under a thirty-payment whole life policy? - CORRECT
ANSWER=> When the insured dies or 30 years from the policy's inception, whichever comes first"
"What does a fixed life annuity offer protection against? - CORRECT ANSWER=> Savings depletion
because of longevity"
QUESTIONS AND VERIFIED ANSWERS| 100 %
CORRECT| GRADE A (LATEST 2024/ 2025 UPDATE)
"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? - CORRECT
ANSWER=> Income taxes plus a 10% penalty tax on $30,000"
"An employee quits her job where she has a balance of $10,000 in qualified plan. If she decides to
rollover her plan to a Traditional IRA, how much will she receive from the plan administrator, and how
long does she have to complete the tax-free rollover? - CORRECT ANSWER=> $8,000; 60 days"
"The insurance coverage in a variable life insurance policy may fluctuate based on the value of -
CORRECT ANSWER=> Its underlying investments"
"In an individual retirement account (IRA), rollover contributions are - CORRECT ANSWER=> Not
limited by dollar amount"
"Who elects the governing body of a mutual insurance company? - CORRECT ANSWER=>
Policyholders"
“The premiums paid by an employer for his employee's group life insurance are usually considered to be
- CORRECT ANSWER=> Tax-deductible to the employer"
"Which of these is NOT considered to be a cost connected with an individual's death? - CORRECT
ANSWER=> Business expenses"
"For insurance purposes, similar objects which are exposed to the same perils are referred to as -
CORRECT ANSWER=> Homogeneous exposure units"
"These are all accurate statements regarding universal life insurance EXCEPT - CORRECT ANSWER=>
Policy loans are not permitted"
"Which of these is NOT relevant when determining the amount of personal life insurance needed? -
CORRECT ANSWER=> Local unemployment rate"
"Why would evidence of insurability be required for a person insured with a variable universal life
policy? - CORRECT ANSWER=> The face amount is increased"
, "At what point are death proceeds paid in a joint life policy? - CORRECT ANSWER=> When the first
insured dies"
"What is considered a valid reason for small businesses to insure the lives of its major shareholders? -
CORRECT ANSWER=> Fund a buy-sell agreement"
"Which action will trigger a penalty tax on premature distributions from a modified endowment contract
(MEC)? - CORRECT ANSWER=> Policy loans"
"Dividends from a mutual insurance company are paid to whom? - CORRECT ANSWER=> Policyowners"
"Traditional individual retirement annuity (IRA) distributions must start by - CORRECT ANSWER=> April
1st of the year following the year the participant attains age 70 1/2"
"How are Roth IRA distributions normally taxed? - CORRECT ANSWER=> Distributions are received tax-
free"
"How can an insurance company minimize exposure to loss? - CORRECT ANSWER=> Reinsurance"
"All of the following statements about traditional individual retirement accounts are false EXCEPT -
CORRECT ANSWER=> 10% penalty is applied to withdrawals before age 59 1/2"
"All of these statements concerning universal life insurance are false EXCEPT - CORRECT ANSWER=>
Policy indicates how much of the premium is used toward company expenses"
"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? - CORRECT ANSWER=> 100"
"Which statement concerning a decreasing term life policy is accurate? - CORRECT ANSWER=> Face
amount decreases over time"
"An employer that offers a qualified retirement plan to its employees is eligible to - CORRECT
ANSWER=> Make tax-deductible contributions to the plan"
"How long is a person covered for under a limited pay whole life policy? - CORRECT ANSWER=> Until
age 100"
"When does an insured stop making payments under a thirty-payment whole life policy? - CORRECT
ANSWER=> When the insured dies or 30 years from the policy's inception, whichever comes first"
"What does a fixed life annuity offer protection against? - CORRECT ANSWER=> Savings depletion
because of longevity"
