1. The State's __________ branch enforces the existing statutes that have been put in place.
A. Legislative
B. Executive
C. Electoral
D. Judicial
2. Which of the following could initiate the Accelerated Benefits Provision or Rider of a life policy?
A. A presumptive disability
B. A total disability not reducing life expectancy
C. A condition that is terminal
D. nability to perform some activities of daily living
3. If funds are prematurely withdrawn from a Modified Endowment Contract (MEC) they are subject to a _____% penalty on any gains.
A. 15
B. 6
C. 20
D. 10
4. A qualified plan pre-mature withdrawal tax penalty can be waived in all of the following circumstances, except:
A. Death
B. Buying a first vacation home
C. Qualified educational expenses
D. Disability
5. With a Contributory Group Life Plan, what percentage of the employees must participate?
A. A full 100%
B. At least 60%
C. At least 75%
D. At least 50%
6. Buy-Sell agreements are used for all of the following entities, except:
A. Large Public Corporations
B. Sole Proprietorships
C. Closely held businesses
D. Partnerships
7. ERISA requires which of the following?
A. Qualified plans must meet certain minimum standards
B. Employers must be able to benefit equally with the employees and beneficiaries
C. That employers establish pension plans for their employees
D. That every plan has the same vesting schedule
8. Which of the following scenarios will trigger an income tax due?
A. Cancelling the policy during the free look period
B. Taking out a policy loan in an amount greater than the total premiums paid in
C. Interest earned on dividends left on deposit with the insurer
D. Receiving a participating policy's cash dividend
9. consist(s) of the amount of premium that is returned to the policyowner if the insurer achieves lower mortality and expense costs than expected.
A. The cash value
B. The death benefit
C. A dividend
D. A policy loan
10. How are employer paid premiums on a group life insurance plan treated for tax purposes?
A. A barter transaction
B. As a personal expense paid on behalf of the employee
C. As an ordinary and necessary business expense
D .As compensation in lieu of cash
11. An insured has paid $1,000 in annual premiums for her permanent life insurance policy for 12 years. Now upon surrendering the policy she is due to receive $15,000 of cash value. How much of this cash value is taxable?
A. $15,000
B. $3,000
C. Zero
D. $12,000
12. The cost basis of a life insurance policy is __________.
A. Cash values plus any outstanding policy loans
B. Cash values in excess of premiums paid
C. Premiums paid less dividendcds or withdrawals
D. Dividends left on deposit at interest plus the policy s cash values
13. If life insurance proceeds are paid to the deceased's estate they may be subject to ________ taxes.
A. Probate
B. Federal Estate
C Federal Income
D. State Income
14. ERISA sets minimum standards for pension plans primarily in the ______ industry.
A. Private
B. Public
15. Jerry has selected a Life Income 10 year Period Certain. What happens to the income payments if he dies in year 4 after starting to receive income benefit payments?
A. The payments are increased by 60% and paid out for the balance of the time remaining on the guaranteed benefit
B. The payments are reduced by 40% then paid out to the surviving beneficiary for the remainder of their life
C. The payments end immediately with any residual values retained by the insurer
D. The payments continue for the balance of the Period Certain to a named beneficiary
16. Which of the following provisions commence at the time of the delivery of the policy to the insured?
A. Misstatement of Age or Gender
B. Insuring Clause
C. Suicide Clause
D. Free Look Period
17. A client purchases an individual disability income policy and receives the policy from the insurer 45 days after application. Upon receipt of the policy, the client typically has ______days to review and return the policy to receive a full refund for any reason.
A. 20
B. 45
C. 35
D. 10
C. Quasi-government
D. Public and Private