Life and annuity (214)

Nonforfeiture values guarantee which of the following for the policyowner?

• That the dividends will be paid annually

• That the death benefit will be paid in a lump sum

• That the policy premiums will never increase

• That the cash value will not be lost

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?

• HR 10 plan

• Profit sharing plan

• 401(k) plan

• Tax-sheltered account plan

An individual has been diagnosed with Alzheimer’s disease. He is insured under a life insurance policy with the accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefit

• Principal is tax free, but interest is taxed.

• The entire benefit will be received tax free.

• The entire living benefit is considered taxable income.

• A portion of the benefit up to a limit is tax free; the rest is taxable income

Life income joint and survivor settlement option guarantees

• Income for 2 or more recipients until they die.

• Payment of interest on death proceeds.

• Payout of the entire death benefit.

• Equal payments to all recipients.

Under an extended term nonforfeiture option, the policy cash value is converted to

• The same face amount as in the whole life policy.

• The face amount equal to the cash value.

• A lower face amount than the whole life policy.

• A higher face amount than the whole life policy.

Which of the following is TRUE regarding variable annuities?

• The funds are invested in the company’s general account.

• The company guarantees a minimum interest rate.

• A person selling variable annuities is required to have only a life agent’s license.

• The annuitant assumes the risks on investment.

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of

• A prearranged funeral plan.

• A viatical settlement.

• Third-party ownership.

• A STOLI policy.

Which of the following features of the Indexed Whole Life policy is NOT fixed?

• Death benefit

• Policy period

• Cash value growth

• Premium

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

• Have permanent kidney failure

• Be at least age 50

• Have attained fully insured status

• Be disabled for at least 1 year

Which of the following riders would NOT cause the Death Benefit to increase?

• Guaranteed Insurability Rider

• Cost of Living Rider

• Accidental Death Rider

• Payor Benefit Rider