Which of the following individuals would NOT be eligible to contribute to a traditional IRA?

A 35-year-old individual receiving unemployment checks

All of the following are appropriate uses of business life insurance EXCEPT

Funding against general financial losses

The purpose of the 7-pay Test is to

Determine if a life policy is a modified endowment contract

Which event will incur the 10% penalty for an early distribution from a qualified plan?

Participant’s early retirement

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Ch. 4 - Other Topics (NC)

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Questions 15

Answers

1
Which of the following individuals would NOT be eligible to contribute to a traditional IRA?
A 50-year-old school teacher
A 35-year-old individual receiving unemployment checks
A 15-year-old student with part-time income
An 18-year-old working student
2
Which of the following individuals must have insurable interest in the insured?
Policyowner
Beneficiary
Producer
Underwriting
3
To receive Social Security Retirement benefits an individual must be
Currently insured
Age 59 ½
Fully insured
Conditionally insured
4
All of the following are appropriate uses of business life insurance EXCEPT
Covering the costs of training a replacement
Funding business continuation agreements
Funding against general financial losses
Compensating executives
5
The purpose of the 7-pay Test is to
Determine if an insurance company is solvent
Determine if a life policy is a modified endowment contract
Require level premium payments for the first 7 years
Ensure that a policy is paid up in 7 years
6
For federal tax purposes, which of the following is TRUE regarding lump-sum death benefit?
It is received tax free
It is taxed as a percentage of income
It is subject to capital gains tax
It is taxed as ordinary income
7
As a field underwriter, an agent has all of the following responsibilities EXCEPT to
Obtain signatures on the application for insurance
Issue the policy
Solicit business
Help prevent adverse selection
8
The main responsibility of a company’s underwriting unit is which of the following?
Provide risk selection
Ensure the policyowner receives appropriate coverage
Limit business written by new agents
Select markets for the agents
9
An employee has how long to convert their group policy to an individual policy?
90 days
120 days
31 days
60 days
10
What is the primary source of information used for insurance underwriting?
Medical records
Private investigations
Credit reports
Application
11
Statements that an applicant makes on the application for insurance are called
Representations
Warranties
Declarations
Facts
12
Who would be allowed to make IRA catch-up contributions?
Individuals who have dependents
Anybody who has a traditional IRA
Individuals age 50 or older
An IRA owner who contributes less than the maximum amount
13
Which event will incur the 10% penalty for an early distribution from a qualified plan?
Death of the participant
Payment of post-secondary education expenses
Disability of the participant
Participant’s early retirement
14
When the insurer relinquishes control of the policy by mailing it to the owner it is considered
Solicited
Delivered
Issued
Endowed
15
Which of the following risk classifications would pay the lowest premiums?
Substandard
Standard
Preferred
Rated up

Ch. 4 - Other Topics (NC) Flashcards | StudBud