KENTUCKY LIFE INSURANCE STATE EXAM PRACTICE

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KENTUCKY LIFE INSURANCE STATE EXAM PRACTICE

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Which statement regarding a fixed period settlement option is correct?

Answer:

The installment payment amount is determined by the total number of installments Question 2: Under a 1035 Exchange and subsequent surrender of an annuity contract, the tax consequence would be which of the following?

Answer:

Only the gains are subject to tax at ordinary rates

Question 3: How are Roth IRA distributions normally taxed?

Answer:

Distributions are received tax-free Question 4: John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions?

Answer:

Given written consent by the state insurance regulatory agency

Question 5: How can an insurance company minimize exposure to loss?

Answer:

Reinsurance

Question 6: What happens to the death benefit of a life insurance policy if the insured accepts a payment from the accelerated (living) benefit provision?

Answer:

Reduced Question 7: Under present OASDI (old age survivor and disability insurance) program, PIA represents?

Answer:

Average earnings over the number of years worked Question 8: All of the following are true about annuities EXCEPT:

Answer:

They have all the same characteristics as life insurance Question 9: When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?

Answer:

Settlement will be reduced Question 10: Which of these statements regarding the life insurance premium for a children's term rider is correct?

Answer:

Level premium no matter how many children Question 11: What determines how much an annuitant is paid for a variable annuity?

Answer:

Fluctuates according to the market value of the underlying securities in a separate account Question 12: What is considered interstate travel under the Federal Fraud and False Statements Act?

Answer:

Puerto Rico

Question 13: An employee quits her job where she has a balance of $10,000 in qualified plan. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator, and how long does she have to complete the tax-free rollover?

Answer:

$8,000; 60 days Question 14: A policyowner fell behind on the premium payments of a whole life policy and it is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?

Answer:

Face amount minus the loan balance and past-due premium

Question 15: Which tax is normally associated with death?

Answer:

Federal estate tax Question 16: How long can an insurer normally postpone paying the cash value of a surrendered life insurance policy?

Answer:

• months

Question 17: An annuity which starts paying benefits within a month after issuance is called a(n)

Answer:

Immediate annuity Question 18: What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up?

Answer:

Decreases Question 19: Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?

Answer:

When the contract has been in force for a stated time period

Question 20: A Modified Endowment Contract is created when

Answer:

The total premiums in the policy's first seven years exceeds the net premiums of the seven-pay policy Question 21: Which statement regarding the cash value of a whole life insurance policy is correct?

Answer:

Payable to the policy owner when policy has been surrendered Question 22: Which of these is NOT considered to be a cost connected with an individual's death?

Answer:

Business expenses Question 23: When the extended term life nonforfeiture option is chosen, the coverage will be

Answer:

Level term for a stated period of time Question 24: An insurance policy is initially a two party contract. The term Unilateral permits the enforcement of the policy's terms by which party?

Answer:

Insured Question 25: All of these statements concerning universal life insurance are false EXCEPT

Answer:

Policy indicates how much of the premium is used toward company expenses Question 26: The relationship between the total investment in an annuity to the total expected return on a contract is the

Answer:

Exclusion ratio

Question 27: How is a collateral assignment used in a life insurance contract?

Answer:

Assign specific ownership rights to a creditor