1135 Life & Health Insurance Exam
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1. Which of these must be disclosed in a company's universal life policy?: The
policy's surrender charges
2. Which type of life insurance typically offers mortgage protection?: Decreasing term
3. Dividends from a mutual insurance company are paid to whom?: Policyowners
4. These are all accurate statements regarding universal life insurance EXCEPT-
: Policy loans are not permitted
5. Which of these is NOT a reason for a business to buy key person life insur-
ance?: A pension deficiency if the key employee dies
6. Which of these do NOT indicate the presence of insurable interest in a life
insurance contract?: Lifelong friendship
7. Which of these statements is true regarding an adjustable life insurance
policy?: Policyowners are given the option of alternating between forms of term and whole life insurance
8. Which of these is NOT relevant when determining the amount of personal life
insurance needed?: Local unemployment rate
9. XYZ Insurance Company gives direct authority to its producers to sell insur-
ance through an agency contract, but nothing is stated regarding the collection
of premiums. Which authority grants the producer the right to collect premi-
ums?: Implied
10. What kind of life insurance policy allows the policyowner the choice of
investments along with adjustable premiums?: Variable universal life
11. In life insurance, the needs approach is used mostly to establish: how much life
insurance a client should apply for
12. Which statement concerning adjustable life insurance is accurate?: The face
amount and premiums can be changed simultaneously by the policyowner
13. In what way are insurance policies said to be aleatory?: Involves the potential for the
unequal exchange of value
14. Which statement concerning an adjustable life insurance policy is FALSE?: -
Evidence of insurability is always necessary when there is a change in premium
15. When funds are shifted straight from one IRA to another IRA, what percent-
age of the tax is withheld?: None
16. How does the cost for a survivorship life policy compare to the cost of
combining two separate life insurance policies?: Survivorship life policy is lower
, 1135 Life & Health Insurance Exam
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17. In a qualified retirement plan, the yearly contributions to an employee's
account: are restricted to maximum levels set by the IRS
18. An insurance company can be liable for a producer's unauthorized acts: when
the agency contract is vague concerning the authority given
19. An individual participant personally received eligible rollover funds from a
profit-sharing plan. What is the income tax withholding requirements for this
transaction?: 20% is withheld for income taxes
20. 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?: 100%
21. All of these are considered features of whole life insurance EXCEPT: Initial cost is
lower than for an equivalent amount of term insurance
22. In an individual retirement account (IRA), rollover contributions are: not limited
by dollar amount
23. Peter, age 50, surrenders his modified endowment contract (MEC). How is
the gain treated for federal income tax purposes?: The gain is added to his gross income and
a penalty tax is assessed on the gain
24. Which tax would an IRA participant be subjected to on distributions received
prior to age 59 1/2?: Ordinary income tax and a 10% tax penalty for early withdrawal
25. 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 allow-
able?: $25,000
26. The insurance coverage in a variable life insurance policy may fluctuate
according to: its underlying investments
27. 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: marita
deduction
28. An employer that offers a qualified retirement plan to its employees is
eligible to: make tax-deductible contributions to the plan
29. What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old?: Less than the policy's face amount
, 1135 Life & Health Insurance Exam
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30. Which statement regarding the cash value of a whole life insurance policy is
correct?: Available to the policyowner when policy has been surrendered
31. Which of these factors do NOT affect life insurance premium rates?: An insurer's
rating
32. Which life insurance settlement option pays lifetime benefits to two or more
people?: Joint and survivor
33. Which would be described as a beneficiary designation by class?: Children of the
insured
34. Which of these pays an income to two or more annuitants until the death of
the last annuitant?: Joint and survivor annuity
35. The contract owner in a single premium deferred annuity (SPDA): makes only one
premium payment
36. During an annuity's liquidation phase, the annuitant normally: receives benefit
payments at regular intervals
37. 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: Family term rider
38. 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: period certain
39. A source of supplemental income for a life insurance policyowner can be
derived from the policy's: cash value
40. Which of these is an accurate statement regarding a fixed period settlement
option on a life insurance policy?: A portion of the payments paid to the beneficiary stems from interest
generated from the proceeds
41. The beneficiary of a life insurance policy is normally chosen by whom?: Policy-
owner
42. A life insurance policy that includes a return of premium rider will pay how
much upon the insured's death?: Face amount plus total premiums paid
43. Which report contains information regarding an individual's general reputa-
tion and credit standing?: Consumer report
Study online at https://quizlet.com/_hsxxa7
1. Which of these must be disclosed in a company's universal life policy?: The
policy's surrender charges
2. Which type of life insurance typically offers mortgage protection?: Decreasing term
3. Dividends from a mutual insurance company are paid to whom?: Policyowners
4. These are all accurate statements regarding universal life insurance EXCEPT-
: Policy loans are not permitted
5. Which of these is NOT a reason for a business to buy key person life insur-
ance?: A pension deficiency if the key employee dies
6. Which of these do NOT indicate the presence of insurable interest in a life
insurance contract?: Lifelong friendship
7. Which of these statements is true regarding an adjustable life insurance
policy?: Policyowners are given the option of alternating between forms of term and whole life insurance
8. Which of these is NOT relevant when determining the amount of personal life
insurance needed?: Local unemployment rate
9. XYZ Insurance Company gives direct authority to its producers to sell insur-
ance through an agency contract, but nothing is stated regarding the collection
of premiums. Which authority grants the producer the right to collect premi-
ums?: Implied
10. What kind of life insurance policy allows the policyowner the choice of
investments along with adjustable premiums?: Variable universal life
11. In life insurance, the needs approach is used mostly to establish: how much life
insurance a client should apply for
12. Which statement concerning adjustable life insurance is accurate?: The face
amount and premiums can be changed simultaneously by the policyowner
13. In what way are insurance policies said to be aleatory?: Involves the potential for the
unequal exchange of value
14. Which statement concerning an adjustable life insurance policy is FALSE?: -
Evidence of insurability is always necessary when there is a change in premium
15. When funds are shifted straight from one IRA to another IRA, what percent-
age of the tax is withheld?: None
16. How does the cost for a survivorship life policy compare to the cost of
combining two separate life insurance policies?: Survivorship life policy is lower
, 1135 Life & Health Insurance Exam
Study online at https://quizlet.com/_hsxxa7
17. In a qualified retirement plan, the yearly contributions to an employee's
account: are restricted to maximum levels set by the IRS
18. An insurance company can be liable for a producer's unauthorized acts: when
the agency contract is vague concerning the authority given
19. An individual participant personally received eligible rollover funds from a
profit-sharing plan. What is the income tax withholding requirements for this
transaction?: 20% is withheld for income taxes
20. 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?: 100%
21. All of these are considered features of whole life insurance EXCEPT: Initial cost is
lower than for an equivalent amount of term insurance
22. In an individual retirement account (IRA), rollover contributions are: not limited
by dollar amount
23. Peter, age 50, surrenders his modified endowment contract (MEC). How is
the gain treated for federal income tax purposes?: The gain is added to his gross income and
a penalty tax is assessed on the gain
24. Which tax would an IRA participant be subjected to on distributions received
prior to age 59 1/2?: Ordinary income tax and a 10% tax penalty for early withdrawal
25. 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 allow-
able?: $25,000
26. The insurance coverage in a variable life insurance policy may fluctuate
according to: its underlying investments
27. 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: marita
deduction
28. An employer that offers a qualified retirement plan to its employees is
eligible to: make tax-deductible contributions to the plan
29. What is the guaranteed cash value of a whole life insurance policy when the
insured turns 65 years old?: Less than the policy's face amount
, 1135 Life & Health Insurance Exam
Study online at https://quizlet.com/_hsxxa7
30. Which statement regarding the cash value of a whole life insurance policy is
correct?: Available to the policyowner when policy has been surrendered
31. Which of these factors do NOT affect life insurance premium rates?: An insurer's
rating
32. Which life insurance settlement option pays lifetime benefits to two or more
people?: Joint and survivor
33. Which would be described as a beneficiary designation by class?: Children of the
insured
34. Which of these pays an income to two or more annuitants until the death of
the last annuitant?: Joint and survivor annuity
35. The contract owner in a single premium deferred annuity (SPDA): makes only one
premium payment
36. During an annuity's liquidation phase, the annuitant normally: receives benefit
payments at regular intervals
37. 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: Family term rider
38. 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: period certain
39. A source of supplemental income for a life insurance policyowner can be
derived from the policy's: cash value
40. Which of these is an accurate statement regarding a fixed period settlement
option on a life insurance policy?: A portion of the payments paid to the beneficiary stems from interest
generated from the proceeds
41. The beneficiary of a life insurance policy is normally chosen by whom?: Policy-
owner
42. A life insurance policy that includes a return of premium rider will pay how
much upon the insured's death?: Face amount plus total premiums paid
43. Which report contains information regarding an individual's general reputa-
tion and credit standing?: Consumer report
