TENNESSEE LIFE AND HEALTH INSURANCE FINAL PAPER 2025
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔From a life insurance regulatory perspective, the primary problem with stranger-
originated life insurance (STOLI) is that it is: - ✔✔essentially wagering on a stranger's
life
✔✔Who is the contingent beneficiary in the following beneficiary designation: "Sally
Grant, wife of the insured, if she survives the insured; otherwise to Frank Grant, brother
of the insured; otherwise to the ASPCA." - ✔✔Frank Grant
✔✔Which of the following statements regarding the tax treatment of endowment
contracts is correct?
a.) Endowment contracts no longer get the good tax treatment given to life insurance
policies.
b.) Endowment contracts are treated like other life insurance policies for tax purposes.
c.) Congress has given endowment contracts the best tax status of all types of
insurance policies.
d.) Endowment contracts are still popular today because of their good tax treatment. -
✔✔a.) Endowment contracts no longer get the good tax treatment given to life
insurance policies
✔✔Joe, age 35, has a life-paid-up-at-65 limited payment life insurance policy. Under the
policy's waiver of premium rider, if Joe becomes totally and permanently disabled,
premiums will be waived: - ✔✔to age 65
✔✔Alex owns a "home service" life insurance policy, which means he most likely pays
his premiums in which way? - ✔✔weekly or monthly by mail, automatic deduction from
a bank account, or personally to the agent
✔✔Cathy took out a $100,000 decreasing 20-year term life insurance policy. In the
middle of year ten, when the death benefit on her policy equals $50,000, Cathy dies.
What will Cathy's beneficiary get? - ✔✔$50,000
✔✔U.S. tax law requires that retirees begin taking distributions from their qualified plans
no later than April 1 of the year following the year the participant turns - ✔✔age 70
✔✔Natasha is insured under a $500,000 universal life insurance policy. Her son, Todd,
is the beneficiary. On October 1, Natasha took a $15,000 loan from the policy and died
six months later without paying it back. What amount will Todd receive? - ✔✔$485,000
less any interest owed on the loan
✔✔To qualify for Social Security disability benefits, a worker must satisfy a waiting
period of how many months? - ✔✔five months
, ✔✔A financial product that lets consumers save money in a tax-deferred manner and
may eventually be used to provide income that is guaranteed for life best describes
a(n): - ✔✔deferred annuity
✔✔To be considered permanently insured for OASDI purposes, a worker must have
how many quarters of coverage? - ✔✔40
✔✔As distribution vehicles, annuities are useful for all the following reasons EXCEPT:
a.) be structured to fit almost any payout period or term
b.) ensure that income continues for the lives of two people
c.) protect against the financial impact of dying too soon
d.) ensure that one's income cannot be outlived - ✔✔c.) protect against the financial
impact of dying too soon
✔✔If Ken becomes eligible (by a medical reason) for payments under his life insurance
long-term care rider, he must be certified as unable to perform which of the following? -
✔✔at least two activities of daily living for at least 90 days
✔✔Deferred annuities accumulate funds for future distribution. Under what
circumstances are these funds forfeitable to the insurer? - ✔✔under no circumstances
✔✔Which one of the following most typically arranges a viatical settlement agreement
between the parties? - ✔✔the viatical settlement broker
✔✔The requirement that insurable interest must exist when a life insurance policy is
purchased is intended to prevent people from: - ✔✔using life insurance for wagering or
betting purposes
✔✔Derek buys an individual life insurance policy after he loses his job and is no longer
covered by his former employer's group plan. However, he dies during the conversion
period and before the policy takes effect. Which of the following statements is true?
a.) A death benefit will not be paid.
b.) A death benefit will be paid under the group plan.
c.) A death benefit will be paid under the individual plan.
d.) A death benefit will be paid by both the group and individual plans. - ✔✔b.) A death
benefit will be paid under the group plan.
✔✔Protection from damages resulting from a lawsuit brought by an insurance customer
against an insurance producer for breach of fiduciary duties would be covered under
what kind of policy? - ✔✔errors and omissions insurance
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔From a life insurance regulatory perspective, the primary problem with stranger-
originated life insurance (STOLI) is that it is: - ✔✔essentially wagering on a stranger's
life
✔✔Who is the contingent beneficiary in the following beneficiary designation: "Sally
Grant, wife of the insured, if she survives the insured; otherwise to Frank Grant, brother
of the insured; otherwise to the ASPCA." - ✔✔Frank Grant
✔✔Which of the following statements regarding the tax treatment of endowment
contracts is correct?
a.) Endowment contracts no longer get the good tax treatment given to life insurance
policies.
b.) Endowment contracts are treated like other life insurance policies for tax purposes.
c.) Congress has given endowment contracts the best tax status of all types of
insurance policies.
d.) Endowment contracts are still popular today because of their good tax treatment. -
✔✔a.) Endowment contracts no longer get the good tax treatment given to life
insurance policies
✔✔Joe, age 35, has a life-paid-up-at-65 limited payment life insurance policy. Under the
policy's waiver of premium rider, if Joe becomes totally and permanently disabled,
premiums will be waived: - ✔✔to age 65
✔✔Alex owns a "home service" life insurance policy, which means he most likely pays
his premiums in which way? - ✔✔weekly or monthly by mail, automatic deduction from
a bank account, or personally to the agent
✔✔Cathy took out a $100,000 decreasing 20-year term life insurance policy. In the
middle of year ten, when the death benefit on her policy equals $50,000, Cathy dies.
What will Cathy's beneficiary get? - ✔✔$50,000
✔✔U.S. tax law requires that retirees begin taking distributions from their qualified plans
no later than April 1 of the year following the year the participant turns - ✔✔age 70
✔✔Natasha is insured under a $500,000 universal life insurance policy. Her son, Todd,
is the beneficiary. On October 1, Natasha took a $15,000 loan from the policy and died
six months later without paying it back. What amount will Todd receive? - ✔✔$485,000
less any interest owed on the loan
✔✔To qualify for Social Security disability benefits, a worker must satisfy a waiting
period of how many months? - ✔✔five months
, ✔✔A financial product that lets consumers save money in a tax-deferred manner and
may eventually be used to provide income that is guaranteed for life best describes
a(n): - ✔✔deferred annuity
✔✔To be considered permanently insured for OASDI purposes, a worker must have
how many quarters of coverage? - ✔✔40
✔✔As distribution vehicles, annuities are useful for all the following reasons EXCEPT:
a.) be structured to fit almost any payout period or term
b.) ensure that income continues for the lives of two people
c.) protect against the financial impact of dying too soon
d.) ensure that one's income cannot be outlived - ✔✔c.) protect against the financial
impact of dying too soon
✔✔If Ken becomes eligible (by a medical reason) for payments under his life insurance
long-term care rider, he must be certified as unable to perform which of the following? -
✔✔at least two activities of daily living for at least 90 days
✔✔Deferred annuities accumulate funds for future distribution. Under what
circumstances are these funds forfeitable to the insurer? - ✔✔under no circumstances
✔✔Which one of the following most typically arranges a viatical settlement agreement
between the parties? - ✔✔the viatical settlement broker
✔✔The requirement that insurable interest must exist when a life insurance policy is
purchased is intended to prevent people from: - ✔✔using life insurance for wagering or
betting purposes
✔✔Derek buys an individual life insurance policy after he loses his job and is no longer
covered by his former employer's group plan. However, he dies during the conversion
period and before the policy takes effect. Which of the following statements is true?
a.) A death benefit will not be paid.
b.) A death benefit will be paid under the group plan.
c.) A death benefit will be paid under the individual plan.
d.) A death benefit will be paid by both the group and individual plans. - ✔✔b.) A death
benefit will be paid under the group plan.
✔✔Protection from damages resulting from a lawsuit brought by an insurance customer
against an insurance producer for breach of fiduciary duties would be covered under
what kind of policy? - ✔✔errors and omissions insurance
