All of the following statements regarding annuities are true EXCEPT
A)
an annuity is classified as immediate or deferred, depending on when benefit payments begin
B)
the annuitant is always the same person as the owner of the annuity
C)
straight life annuities provide income as long as the annuitant lives
D)
the surrender charge serves as a back-end load when the annuity is canceled in its early years - B)
the annuitant is always the same person as the owner of the annuity
Transferring total ownership of a life insurance policy may be accomplished in which of the following
ways?
A)
Collateral assignment
B)
Total surrender
C)
Absolute assignment
D)
Partial surrender - C)
Absolute assignment
A group life insurance plan is considered noncontributory when
A)
the employee pays part or all of the premium for the plan
,B)
the service organization pays part of the premium
C)
the employer pays all of the premium for the plan
D)
the third-party administrator pays the premium for the plan - C)
the employer pays all of the premium for the plan
Which of the following types of life insurance policy was designed to combine the protection features of
traditional life insurance with the cash value growth potential of securities?
A)
Term life
B)
Universal life
C)
Variable life
D)
Whole life - C)
Variable life
In an employer-paid group disability policy, if the employee becomes disabled and the benefit is
$2,000/month, which of the following is CORRECT?
A)
Benefits are tax deductible to the employer.
B)
Benefits are not taxable to the employee.
C)
Benefits are taxable to employees.
D)
,Premiums are taxable to employer. - B)
Benefits are not taxable to the employee.
Group health insurance premiums paid by the employer are
A)
sometimes tax deductible
B)
partially tax deductible
C)
not tax deductible
D)
tax deductible as a business expense - D)
tax deductible as a business expense
All of the following are required to sign an application for life insurance EXCEPT
A)
the beneficiary
B)
the applicant
C)
the agent
D)
the insured - A)
the beneficiary
Benefits received from a medical expense plan are
A)
not taxable
B)
, fully taxable
C)
taxable to the extent that they exceed premiums paid
D)
taxable to the extent that they exceed the actual cost of medical care - A)
not taxable
All of the following are ways in which insurers issue health insurance policies when an impairment is
indicated. Which is the most common approach used with disability income policies?
A)
Issuing the policy with a reduced-benefit amount
B)
Issuing the policy with a reduced-benefit period
C)
Issuing the policy with a longer elimination period
D)
Issuing the policy with an exclusion rider - A)
Issuing the policy with a reduced-benefit amount
Elimination (waiting) periods in disability income policies are designed to
A)
help keep premium rates at a profitable level
B)
last generally for 1 year
C)
eliminate claims for long-term disabilities
D)
specify a limited period of time at the start of disability when benefits are not payable - D)
specify a limited period of time at the start of disability when benefits are not payable
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