101-125
What is used to determine the amount of an annuity distribution that is exempt from taxation?
Inclusion ratio
The exclusion ratio
Rule of exclusion
The number of deaths during a year compared with the total number of persons exposed in the class is known as
The mortality rates
Death to life ratio
Viability rates
The insured bought an annuity ten years ago. He will retire in five years. To determine the value of his annuity, he must multiply the value of the "accumulation units" he owns, times the value of the "separate account". This type of annuity is known as a
Variable annuity
Fixed annuity
Variable indexed annuity
All of the following are true about term insurance policies EXCEPT the
Face amount is paid when the insured dies
Face amount is paid to the beneficiary
Face amount is paid if the insured survives to the end of the policy period
A life insurance policy dividend is
Paid to the insurance company
Legally defined as a return of excess premium and not taxable
Paid to the beneficiary
Life insurance policies written without a physical examination are called
Medical
Health related
Life insurance
Non-medical
Why is the delivery of a life insurance policy important?
The free-look period begins on the policy delivery date
The free look period end on the policy delivery date
30 more extra days are added to the free look period
What is an ESOP
Employee Stock Ownership Plan
Employer Supplier Ownership Plan
Employer Service Ownership Plan
Which policy provision protects the insurer against possible adverse selection?
Living benefit clause
Suicide clause
ESOP
An insured replaces an exciting annuity with a new one and must pay a surrender charge for canceling the existing annuity. The new policy holds no greater financial benefits to the insured than the existing contract. This is an example of
Necessary replacement
Double replacement
An unnecessary replacement
A group life policy is issued on a contributory basis. This means that the
Insured employees will pay part of the premium
The company and the employer contributes
The employer and the insurance company will pay part of the premium
What is the penalty tax imposed on amounts received from a modified endowment contract?
15%
10%
25%
A participating life insurance policy is defined as a contract that
Allows the policyowner to receive a share of surplus in the form of policy dividends
Allows the beneficiary to receive a shares in form of dividends
Allows all involved to receive a share of surplus in the form of policy dividends
All of the following are contained in a mortality table EXCEPT
Number of deaths
Number living at the end of designated year
Which of the policy pays the face amount if the insured survives to the end of a certain period?
Term policy
Endowment insurance
Whole life
A husband and wife have a disabled child who is financially dependent upon them. The death of one parent would not result in financial disaster for the disabled child, but the death of both parents would. Which policy should they purchase?
Second-to-die policy
First-to-die policy
Last-to-die policy
How can partners guarantee a market for their share of the business in the event of death?
Employee-Employer agreement plans
Buy-get agreements
Buy-sell agreements
Which policy covering two or more individuals terminates after paying benefits on the first to die?
Second-to-die policy
Joint life policy
Buy-sell agreements
The accidental benefit rider is also known as
Triple indemnity
Double indemnity
Multiplying indemnity
The use of non-medical life insurance accomplishes all of the following EXCEPT
Insured can avoid answering medical question on the application
Insured must give personal information
Who MUST sign a statement acknowledging that a life insurance policy illustration was given to an applicant?
Beneficiary and insured
Beneficiary and applicant
Insurance company and beneficiary
The applicant and the agent
In financial planning, the human life value concept is based on individual's
Income
Age
Life span
Occupation
When does an individual have an insurable interest in the life of another person?
The individuals depend on the other person for financial support
The individual is a person of intrest
The individual is a minor
The cost of employer-provided group life insurance above $50,000 is
Untaxable
Taxable as income to the employee
Taxed as expenses to the employee
If a term life insurance policy is renewable, the renewal provision usually state that:
A higher premium is payable at each renewal
Lower premium is payable at each renewal
A premium at the same rate is payable at each renewal
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