Xcel State Exam Simulator
A provision that allows a policyowner to withdraw a policy's cash value interest free is an)
A) partial surrender
B) waiver of premium
C) automatic premium loan
D) grace period - ANS-A) partial surrender
A rollover from a Traditional IRA to another IRA MUST be done within _ days to avoid tax
consequences.
A) 15
B) 30
C) 60
D) 90 - ANS-C) 60
A Roth IRA owner must be at least what age in order to make tax-free withdrawals?
A) 59 1/2 and owned account for a minimum of 10 years
B) 59 1/2 and owned account for a minimum of 5 years
C) 70 1/2 and owned account for a minimum of 10
years
D) 70 1/2 and owned account for a minimum of 5 years - ANS-B) 59 1/2 and owned account for
a minimum of 5 years
A savings vehicle designed to first accumulate funds and then systematically liquidates the
funds is called a(n)
A) immediate annuity
B) deferred annuity
C) endowment
D) whole life policy - ANS-B) deferred annuity
A worker is entitled to Social Security disability benefits if all of the following are true, EXCEPT
for:
A) worker is under age 65
B) worker is insured for disability benefits
C) disability is expected to continue for 12 months or result in death
D) worker cannot perform his or her current job, but is actively seeking other employment -
ANS-D) worker cannot perform his or her current job, but is actively seeking other employment
,According to Social Security, an individual with 6 credits of coverage during the previous
13-quarter period is considered to be:
A) partially insured
B) currently insured
C) fully insured
D) not insured - ANS-B) currently insured
According to the PPACA, the medical enrollment tier that has 80% actuarial value is called
A) bronze
B) platinum
C) gold
D) silver - ANS-C) gold
All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals
EXCEPT
A) First time home purchase
B) Stock purchase
C) Qualified college expenses
D) Death of the participant - ANS-B) Stock purchase
All of the following statements correctly describe the purpose of Social Security EXCEPT
A) It provides a source of income for a meaningful standard of living during retirement
B) It provides basic protection against financial problems accompanying death, disability, and
retirement
C) It augments a sound personal insurance plan
D) It provides retirement and survivor benefits to a worker and the worker's family - ANS-A) It
provides a source of income for a meaningful standard of living during retirement
Social Security enhances, but does not
replace, a sound personal insurance plan.
An annuitant dies during the distribution period.
What kind of annuity will return to a beneficiary the difference between the annuity value and the
income payments already made?
A) Variable annuity
B) Refund annuity
C) Rebate annuity
D) Return annuity - ANS-B) Refund annuity
, An annuitant is guaranteed to NOT outlive their benefits with a(n)
A) Survivorship clause
B) Guaranteed lifetime withdrawal benefit
C) Period certain provision
D) Guaranteed minimum accumulation benefit - ANS-B) Guaranteed lifetime withdrawal benefit
An annuitant would like to determine the amount of an annuity distribution that is exempt from
taxation. What is used to calculate this?
A) Mortality rate
B) Exclusion ratio
C) Morbidity rate
D) Debt-to-Equity ratio - ANS-B) Exclusion ratio
An annuitant would like to determine the current value of her annuity. To do this, she multiplies
the number of "accumulation units" she owns times the unit value of the "separate account".
What kind of annuity BEST matches this description?
A) Variable annuity
B) Fixed annuity
C) Immediate annuity
D) Life annuity - ANS-A) Variable annuity
A variable annuity holds its investments in an insurer's separate account, as opposed to the
insurer's general account. These separate accounts usually hold non-guaranteed equity
investments such as stocks and mutual funds.
Variable annuities shift the investment risk from the insurer to the annuity owner.
An annuity is primarily used to provide
A) retirement income
B) disability income
C) long-term care benefits
D) death benefits - ANS-A) retirement income
An example of a tax-qualified retirement plan would be a(n)
A) equity compensation plan
B) defined contribution plan
C) executive index plan
D) 1035 exchange plan - ANS-B) defined contribution plan
A provision that allows a policyowner to withdraw a policy's cash value interest free is an)
A) partial surrender
B) waiver of premium
C) automatic premium loan
D) grace period - ANS-A) partial surrender
A rollover from a Traditional IRA to another IRA MUST be done within _ days to avoid tax
consequences.
A) 15
B) 30
C) 60
D) 90 - ANS-C) 60
A Roth IRA owner must be at least what age in order to make tax-free withdrawals?
A) 59 1/2 and owned account for a minimum of 10 years
B) 59 1/2 and owned account for a minimum of 5 years
C) 70 1/2 and owned account for a minimum of 10
years
D) 70 1/2 and owned account for a minimum of 5 years - ANS-B) 59 1/2 and owned account for
a minimum of 5 years
A savings vehicle designed to first accumulate funds and then systematically liquidates the
funds is called a(n)
A) immediate annuity
B) deferred annuity
C) endowment
D) whole life policy - ANS-B) deferred annuity
A worker is entitled to Social Security disability benefits if all of the following are true, EXCEPT
for:
A) worker is under age 65
B) worker is insured for disability benefits
C) disability is expected to continue for 12 months or result in death
D) worker cannot perform his or her current job, but is actively seeking other employment -
ANS-D) worker cannot perform his or her current job, but is actively seeking other employment
,According to Social Security, an individual with 6 credits of coverage during the previous
13-quarter period is considered to be:
A) partially insured
B) currently insured
C) fully insured
D) not insured - ANS-B) currently insured
According to the PPACA, the medical enrollment tier that has 80% actuarial value is called
A) bronze
B) platinum
C) gold
D) silver - ANS-C) gold
All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals
EXCEPT
A) First time home purchase
B) Stock purchase
C) Qualified college expenses
D) Death of the participant - ANS-B) Stock purchase
All of the following statements correctly describe the purpose of Social Security EXCEPT
A) It provides a source of income for a meaningful standard of living during retirement
B) It provides basic protection against financial problems accompanying death, disability, and
retirement
C) It augments a sound personal insurance plan
D) It provides retirement and survivor benefits to a worker and the worker's family - ANS-A) It
provides a source of income for a meaningful standard of living during retirement
Social Security enhances, but does not
replace, a sound personal insurance plan.
An annuitant dies during the distribution period.
What kind of annuity will return to a beneficiary the difference between the annuity value and the
income payments already made?
A) Variable annuity
B) Refund annuity
C) Rebate annuity
D) Return annuity - ANS-B) Refund annuity
, An annuitant is guaranteed to NOT outlive their benefits with a(n)
A) Survivorship clause
B) Guaranteed lifetime withdrawal benefit
C) Period certain provision
D) Guaranteed minimum accumulation benefit - ANS-B) Guaranteed lifetime withdrawal benefit
An annuitant would like to determine the amount of an annuity distribution that is exempt from
taxation. What is used to calculate this?
A) Mortality rate
B) Exclusion ratio
C) Morbidity rate
D) Debt-to-Equity ratio - ANS-B) Exclusion ratio
An annuitant would like to determine the current value of her annuity. To do this, she multiplies
the number of "accumulation units" she owns times the unit value of the "separate account".
What kind of annuity BEST matches this description?
A) Variable annuity
B) Fixed annuity
C) Immediate annuity
D) Life annuity - ANS-A) Variable annuity
A variable annuity holds its investments in an insurer's separate account, as opposed to the
insurer's general account. These separate accounts usually hold non-guaranteed equity
investments such as stocks and mutual funds.
Variable annuities shift the investment risk from the insurer to the annuity owner.
An annuity is primarily used to provide
A) retirement income
B) disability income
C) long-term care benefits
D) death benefits - ANS-A) retirement income
An example of a tax-qualified retirement plan would be a(n)
A) equity compensation plan
B) defined contribution plan
C) executive index plan
D) 1035 exchange plan - ANS-B) defined contribution plan
