Reference no: EM133230152
1. Policy is effective once the agent has completed the application and collected the first full premium.
True
False
2. There is tax consequence if you change a life insurance policy to an annuity contract.
True
False
3. Most of the insurance applicant's medical information can be found in the medical information bureau (MIB)
True
False
4. Section 303 stock redemption provides a solution for the business successor to purchase the share of the insured's business.
True
False
5. Suppose Tom surrenders his whole life policy with cash value of $45,000. He has paid $46,000 during the time he held the policy, As a result $1,000 ($46,000 less $45,000) of the cash surrender value will be subject to federal income tax.
True
False
6. Group life insurance offers more premium payment options than individual life insurance.
True
False
7. One goal of the deferred compensation plan is not be currently taxable.
True
False
8. The minimum number of members for a labor union group is 25 at date of issue.
True
False
9. Death resulting from a crash of a regularly schedule airliner is excluded for the pilot and crew members.
True
False
10. Pension plans are usually defined benefit plans.
True
False
11. There is a penalty if the employee withdraws from the SIMPLE retirement account before age 59 ½
True
False
12. The executive bonus plan is a qualified plan provided by employer.
True
False
13. Due to adverse selection, insurer would rather cover low risk than high risk.
True
False
14. The group life insurance premium is tax deductible for employer as business expense.
True
False
15. The group deferred annuity and individual deferred annuity are different in the determination of premium.
True
False
16. While fixed interest rate is usually 6-8% per year, there is no cap for the variable interest rate.
True
False
17. Under the SIMPLE plan, employer contribution is deductible from employer's income and employee's income.
True
False
18. 403b plan is employee-sponsored qualified retirement plan for public school systems.
True
False
19. When correction is needed, the insurance applicant can simply make a new insurance application to override the original one.
True
False
20. The policy loan needs to be paid back with a specified schedule designated by the insurance company.
True
False
21. If the policyowner has transferred all incidents of ownership as a gift, it qualifies for a present interest gift tax exclusion and the donor will not incur any gift tax liability.
True
False
22. To be eligible for group life insurance, the group must be formed for some purpose other than obtaining life insurance.
True
False
23. In order to avoid needless costs, the agent should discontinue the process of application since insurer will not offer insurance for people with insurability problems.
True
False
24. Life insurance death benefit is usually paid without delay.
True
False
25. Both contributory plan and noncontributory plan has group size requirement.
True
False
26. The key to both cash value accumulation test and guideline premium and corridor test is that cash value can't be too small, in compare with the death benefit or premium.
True
False
27. The policy loan will be approved and in effect immediately upon application since there is cash value as collateral and no credit check is necessary.
True
False