KENTUCKY LIFE INSURANCE STATE EXAM PRACTICE

The premiums paid by an employer for his employee's group life insurance are usually considered to be - Answer-Tax-deductible to the employer Which of these is NOT considered to be a cost connected with an individual's death? - Answer-Business expenses These are all accurate statements regarding universal life insurance EXCEPT - Answer-Policy loans are not permitted Which of these is NOT relevant when determining the amount of personal life insurance needed? - Answer-Local unemployment rate Who elects the governing body of a mutual insurance company? - Answer-Policyholders Why would evidence of insurability be required for a person insured with a variable universal life policy? - Answer-The face amount is increased At what point are death proceeds paid in a joint life policy? - Answer-When the first insured dies What is considered a valid reason for small businesses to insure the lives of its major shareholders? - Answer-Fund a buy-sell agreement Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)? - Answer-Policy loans Dividends from a mutual insurance company are paid to whom? - Answer-Policyowners Traditional individual retirement annuity (IRA) distributions must start by - Answer-April 1st of the year following the year the participant attains age 70 1/2 How are Roth IRA distributions normally taxed? - Answer-Distributions are received tax-free How can an insurance company minimize exposure to loss? - Answer-Reinsurance All of the following statements about traditional individual retirement accounts are false EXCEPT - Answer-10% penalty is applied to withdrawals before age 59 1/2