Life Insurance and Health Insurance
Exam 2026 Questions and Answers
Section 529 Plans - Correct answer-- state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA - Correct answer-private retirement plan that taxes income before it is
saved, but which does not tax interest on that income when funds are used upon
retirement
Distributions don't have to start before 70.5
401(k) plan - Correct answer-Elective deferral plan that allows employee to reduce
compensation by a stated percentage on a tax deductible/ tax differed basis; often
the employer matches the employee contributions
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,Simplified Employee Pension (SEP) - Correct answer-A qualified plan in which a
smaller employer contributes specified amounts directly into IRA accounts on
behalf of eligible employees
403(b) plan - Correct answer-An elective deferral plan for employees of
organizations such as school systems, churches, and hospitals
Keogh Plan - Correct answer-Retirement plan for self-employed individual and
their qualified employees
Rollover - Correct answer-Tax free withdrawal of cash or other assets from one
retirement program and its reinvestment in another program. It is not considered
income and it is not taxable until a later withdrawal. Has to be completed in 60
days
Transfer - Correct answer-When amounts of a qualified plan are transferred to
another qualified plan
Employee Retirement Income Security Act (ERISA) - Correct answer-Federal law
that increased the responsibility of pension plan trustees to protect retirees,
established certain rights related to vesting and portability, and created the Pension
Benefit Guarantee Corporation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,profit-sharing plan - Correct answer-a benefit whereby employees may share in the
profits of the business
Catch-up Contributions - Correct answer--for those aged 50 or older
-additional $1,000 annually
**Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) -
established the catch up provisions**
Rollover time frame - Correct answer-60 days
Keogh Plan - Correct answer-A federally-approved, tax-deferred savings program
for self-employed people, allowing them to set money aside for their retirement.
Annuity Period - Correct answer-the payout period of an annuity
Flexible Premium Annuity - Correct answer-allows the owner to vary the premium
payments
Deferred Annuity - Correct answer-An annuity that starts sometime in the future.
Variable Annuity - Correct answer-Annuity that has a varying rate of return based
on the mutual funds in which one has invested
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Gramm-Leach-Bliley Act - Correct answer-requires financial institutions to ensure
the security and confidentiality of customer data
Certificate of Insurance (COI) - Correct answer-proof that the insured has
insurance
Market conduct - Correct answer-refers to the marketing practices of insurers and
agents that involve interaction with insureds, claimants, or consumers
expense loading - Correct answer-the amount needed to pay all expenses, including
commissions, general administrative expenses, state premium taxes, acquisition
expenses, and an allowance for contingencies and profit
Straight Life Annuity - Correct answer-The payout option that will guarantee an
annuity payment for the remainder of an individual's life. This option typically
provides the largest monthly payment.
Refund Life Annuity - Correct answer-Provides annuity payments for the
annuitant's lifetime with the guarantee that in no event will total income be less
than the purchase price of the contract. If the annuitant dies before receiving this
amount, the difference is paid to a named beneficiary either as a cash refund or in
installments.
convertible term policy - Correct answer-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Exam 2026 Questions and Answers
Section 529 Plans - Correct answer-- state provided
- can be funded by after tax dollars
- can pay prepaid tuition
- All earnings exempt from federal taxes
- If withdrawn for unqualified withdrawl, 10% penalty
Roth IRA - Correct answer-private retirement plan that taxes income before it is
saved, but which does not tax interest on that income when funds are used upon
retirement
Distributions don't have to start before 70.5
401(k) plan - Correct answer-Elective deferral plan that allows employee to reduce
compensation by a stated percentage on a tax deductible/ tax differed basis; often
the employer matches the employee contributions
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,Simplified Employee Pension (SEP) - Correct answer-A qualified plan in which a
smaller employer contributes specified amounts directly into IRA accounts on
behalf of eligible employees
403(b) plan - Correct answer-An elective deferral plan for employees of
organizations such as school systems, churches, and hospitals
Keogh Plan - Correct answer-Retirement plan for self-employed individual and
their qualified employees
Rollover - Correct answer-Tax free withdrawal of cash or other assets from one
retirement program and its reinvestment in another program. It is not considered
income and it is not taxable until a later withdrawal. Has to be completed in 60
days
Transfer - Correct answer-When amounts of a qualified plan are transferred to
another qualified plan
Employee Retirement Income Security Act (ERISA) - Correct answer-Federal law
that increased the responsibility of pension plan trustees to protect retirees,
established certain rights related to vesting and portability, and created the Pension
Benefit Guarantee Corporation
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,profit-sharing plan - Correct answer-a benefit whereby employees may share in the
profits of the business
Catch-up Contributions - Correct answer--for those aged 50 or older
-additional $1,000 annually
**Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) -
established the catch up provisions**
Rollover time frame - Correct answer-60 days
Keogh Plan - Correct answer-A federally-approved, tax-deferred savings program
for self-employed people, allowing them to set money aside for their retirement.
Annuity Period - Correct answer-the payout period of an annuity
Flexible Premium Annuity - Correct answer-allows the owner to vary the premium
payments
Deferred Annuity - Correct answer-An annuity that starts sometime in the future.
Variable Annuity - Correct answer-Annuity that has a varying rate of return based
on the mutual funds in which one has invested
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Gramm-Leach-Bliley Act - Correct answer-requires financial institutions to ensure
the security and confidentiality of customer data
Certificate of Insurance (COI) - Correct answer-proof that the insured has
insurance
Market conduct - Correct answer-refers to the marketing practices of insurers and
agents that involve interaction with insureds, claimants, or consumers
expense loading - Correct answer-the amount needed to pay all expenses, including
commissions, general administrative expenses, state premium taxes, acquisition
expenses, and an allowance for contingencies and profit
Straight Life Annuity - Correct answer-The payout option that will guarantee an
annuity payment for the remainder of an individual's life. This option typically
provides the largest monthly payment.
Refund Life Annuity - Correct answer-Provides annuity payments for the
annuitant's lifetime with the guarantee that in no event will total income be less
than the purchase price of the contract. If the annuitant dies before receiving this
amount, the difference is paid to a named beneficiary either as a cash refund or in
installments.
convertible term policy - Correct answer-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
