PRACTICE EXAM - NEW YORK LIFE ONLY EXAM QUESTIONS

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PRACTICE EXAM - NEW YORK LIFE ONLY EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -51 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: When using the needs approach for life insurance planning, A lump sum on may be created to provide for all of the following EXCEPT

Answer:

employee benefits Question 2: An insurance policy that can also be classified as a securities product is called

Answer:

Variable Life:

Transfer investment risk, they are considered securities contract.Question 3: Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company

Answer:

Spendthrift clause :

Prevents a beneficiary from recklessly spending benefits.Question 4: A nonparticipating whole life insurance policy was surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value?

Answer:

$16,000 was received tax-free and $4,000 as ordinary income

Question 5: Viatical Settlement

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the sale of a life insurance policy by a terminally ill insured to another party, typically to investors or investor groups, who hope to profit by the insured's early death

Question 6: Split-dollar

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Employer and employee share in the cost of purchasing a life insurance policy on the employee. The employee is also allowed to name the beneficiary.Question 7: What is considered a valid reason for small corporations to insure the lives of its major stockholders?

Answer:

Fund a buy-sell agreement:

In the event of the death of a major stockholders in a business.

Question 8: Which of these must be disclosed in a universal life policy?

Answer:

The policy's surrender charges

Question 9: The absolute assignment of a life insurance policy results in

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all incidents of ownership transferred to the assignee

Question 10: Premature IRA distributions are subject to a penalty tax of

Answer:

10% Question 11: Which of the following disability buy-sell agreements is best suited for businesses with a limited number of partners

Answer:

Cross-purchase agreement:

Allow a company's shareholders to purchase the interest or shares of a partner who dies, becomes incapacitated, or retires. A continuation planning.

Question 12: Maximum coverage for minor

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$50,000

Question 13: Net payment cost index

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Useful of one's premium concern is the amount of death benefits provided in the policy. Helpful comparing future costs.Question 14: What could be the potential result of taking out a cash value loan under a life insurance policy?

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Reduces the amount receivable upon surrender of the contract Question 15: What is the name of the rider that provides in additional purchase option in a life insurance policy

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Guaranteed insurability rider Question 16: When a 10 year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for

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Ten year term insurance for a person aged 55 Question 17: A policyowner is permitted to take out a policy loan on a whole life policy at what point?

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When the policy has a cash value

Question 18: Completed application

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Basic source of insurability information includes identity, age, and marital status etc.

Question 19: The insurance coverage in a variable life insurance policy may vary based on the value of

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Underlying investment :

Question 20: Which of the following is generally a form of group credit life insurance?

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Decreasing term insurance Question 21: What life insurance policy is best suited for paying off an mortgage?

Answer:

Decreasing term life

Question 22: Term Life Insurance

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Does not provide cash benefit at the end of the policy period Question 23: An applicant for life must be informed that testing for Human Immunodeficiency Virus (HIV) infection is used to help determine

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The insurability of the proposed insured Question 24: According to the law of large numbers, hoe would losses be affected if the number of similar insured units increases?

Answer:

Predictability of losses will be improved

Question 25: Collateral assignment

Answer:

The policyowner temporarily assigns a life insurance policy to a creditor as collateral for a loan. Transfer specific ownerships to a creditor.

Question 26: In what way are insurance policies said to be aleatory?

Answer:

Involves the potential for the unequal exchange of values