100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Health and life insurance 2022 QUESTIONS WITH COMPLETE SOLUTIONS $9.99   Add to cart

Exam (elaborations)

Health and life insurance 2022 QUESTIONS WITH COMPLETE SOLUTIONS

 9 views  0 purchase
  • Course
  • Institution

Health and life insurance 2022 QUESTIONS WITH COMPLETE SOLUTIONS Carla has written life insurance policies on the lives of her children. What type of business is this considered? Correct Answer: Controlled John knowingly made an inaccurate comparison of coverage in order to induce his client...

[Show more]

Preview 2 out of 10  pages

  • September 22, 2022
  • 10
  • 2022/2023
  • Exam (elaborations)
  • Questions & answers
avatar-seller
Health and life insurance 2022 QUESTIONS
WITH COMPLETE SOLUTIONS
Carla has written life insurance policies on the lives of her children. What type of
business is this considered? Correct Answer: Controlled

John knowingly made an inaccurate comparison of coverage in order to induce his
client to replace existing life insurance for a new policy John hoped to sell him.
Which unfair trade practice did John commit? Correct Answer: Twisting

Which type of agent works exclusively for an insurance company and normally
does not solicit for other companies? Correct Answer: Captive agent

Which of the following is not a duty of a state's Insurance Commissioner? Correct
Answer: Write the states insurance laws

Shirley's universal life insurance policy has a $100,000 death benefit. Her cash
value is equal to $25,000. What term is used to describe the other $75,000? Correct
Answer: The net amount at risk

Bridget's life insurance policy provides $500,000 of coverage for a period of ten
years, and she pays the same premium each year. At the end of the ten-year term,
the policy will no longer provide any coverage, unless renewed or converted.
Which type of policy does Bridget own? Correct Answer: Level term

Which of the following types of life insurance involves a cash value whose
accumulation depends, in part, on the investment performance of a portfolio of
securities? Correct Answer: Variable life insurance

Sharon, an applicant for life insurance, is interested in obtaining immediate
coverage but wants the permanent insurance protection to begin four months from
now. Which of the following types of term life insurance is likely to best meet her
objectives? Correct Answer: Interim term insurance

Which of the following death benefit options may be found on universal life
insurance policies? Correct Answer: Both a level death Benefit and a generally
increasing death benefit

, Helen requested a $20,000 cash value withdrawal from her universal life insurance
policy, which has a $100,000 death benefit. What would her death benefit be
immediately following her cash value withdrawal? Correct Answer: $80,000
$100,000-$20,000=$80,000

Arthur paid total net premiums of $20,000 for his universal life insurance policy,
which has a cash value of $24,000. Assuming the policy is not a modified
endowment contract and Arthur has never previously received a cash value
withdrawal or a dividend, how much income would he be required to recognize if
he took a $5,000 cash value withdrawal? Correct Answer: $0.
a withdrawal is considered a tax-free recovery of the policyowner's cost basis until
the policyowner's entire cost basis has been fully withdrawn. At this point, any
further withdrawals are deemed to consist of taxable gain. Since Arthur's cost basis
is $20,000 at the time of his cash value withdrawal, he is not required to recognize
any income as a result of the withdrawal. His cost basis is simply reduced by
$5,000.

John requested a partial surrender of his $100,000 whole life insurance policy in
order to access funds in his policy's cash value. The cash value was $50,000 just
prior to the partial surrender and John received $20,000 from the cash value. What
would be the new face amount of the policy? Correct Answer: $60,000
$20,000 of $50,000 is 40%, therefore the payout decreases by 40%; $100,000 -
40%=$60,000

Lee has a terminal illness and has taken a $100,000 viatical loan under his
$150,000 life insurance policy. The provider imposed $5,000 in fees for the loan.
The loan also accrued interest of $8,000, and $12,000 in premiums were paid for
the policy after the loan was made. How much of the death benefit, if any, will
Lee's beneficiary receive upon his death? Correct Answer: $25,000
$100,000+$5,000+$8,000+$12,000=$125,000
$150,000 payout-$125,000 loan and fees/interest=$25,000 left over

Susan's universal life insurance policy is a modified endowment contract. She paid
premiums amounting to $15,000, and never received a dividend or previously took
a distribution. What amount of income would she be required to recognize if she
took a $10,000 cash value withdrawal when the cash value was $23,000? Correct
Answer: $8,000
Policy distributions from a life insurance policy that is deemed a MEC receive
"last-in, first-out" (LIFO) tax treatment. Under LIFO tax treatment, the first
element deemed to be distributed is the taxable gain under the life insurance

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Classroom. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $9.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

67866 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$9.99
  • (0)
  Add to cart