Which of the following is not true about variable universal life policies?:
They have no provision for policy loans and withdrawals.
Which of the following statements best describes how cash value in a life insurance policy is taxed?
Cash value grows tax-deferred, but may be subject to taxation upon withdrawal.
The earliest age that distributions from a nonqualified individual annuity may be made without incurring the 10% IRS early withdrawal penalty is:
59 1/2
All of the following are true about personal contracts, EXCEPT:
Life insurance contracts cannot be assigned.
What is a life insurance settlement option that uses an annuity to pay policy proceeds to the beneficiary for a set number of years?
The fixed-period, or period certain, installment option uses an annuity to pay the policy proceeds to the beneficiary for a certain number of years.
The clause that prevents an insurer from denying a claim, except for nonpayment of premiums, after the policy has been in force for over 2 years is called the:
the incontestable clause
Which of the following premium methods will most likely cause the insured to pay the most premium over the life of their policy?
Monthly
An adjustable life policyowner may do any of the following, EXCEPT:
Only variable life policies allow policyowner's to invest premiums in the insurer's separate account.
Which of the following is true about immediate annuities?
The first benefit payment is typically made 1 month from the purchase date.
They have relatively short accumulation periods.
They can only be funded with a single payment.
What guarantee states that if the policyholder discontinues payment of premiums, the policyholder can have access to the cash value of the policy?
Nonforfeiture provision
An annuity that will not only provide benefits for the life of a husband, but also the wife if she outlives the husband is called:
Joint life and survivorship annuity.
Which of the following is an annuity payout option?
umm
Which of the following is not true about the accelerated benefit rider?
Provides a monthly check when you become disabled.
Which of the following is true regarding taxes on nonqualified annuities?
Premiums are not tax-deductible, but interest is tax-deferred.
Which of the following best describes the annuity period?
is the time during which accumulated money is converted into an income stream.
Which of the following is not a common use for annuities?
Tax-free income
An example of coverage that can be purchased by a husband for his wife along with other dependent family members is:
Voluntary dependent life insurance
Philip named his wife Mary as the primary beneficiary of his life insurance policy. His children are contingent beneficiaries. Under the Uniform Simultaneous Death Act, who will receive the death benefit if Mary and Philip are in a car accident and there
Policy proceeds are paid as if the primary beneficiary died first.
All of the following are federal income tax free transactions for a life insurance policy, EXCEPT:
Gain on policy surrender value
Which of the following is not a settlement option in a life insurance policy?
Extended term option
All of the following are true about Roth IRAs, EXCEPT:
Contributions are tax deductible.
Which of the following is a difference between a limited-pay whole life policy and a straight life policy?
Premiums are higher
All of the following programs quell the fear that some people have of losing their investment if they were to die after only receiving a few payments from their annuity, EXCEPT:
Deferred annuity
Which of the following statements best describes how cash value in a life insurance policy is taxed?
If the policy cash value is surrendered, the interest earned on the cash value is taxable as ordinary income.
What rider can decrease the death benefit when utilized?
Long term rider
Which of the following statements is not true about the tax liabilities for individual life insurance policies?
Policy loans are taxable as income.
Which of the following statements regarding policy loans from personal life insurance policies is not true?
When a personal life insurance policy endows, the amount of any unpaid loan plus interest is not deducted from the policy proceeds.
All of the following are features of variable universal life, EXCEPT:
Insurer decides where to invest premiums