MN State Insurance Exam All Answers Correct
FICA Taxes
How are employee FICA taxes collected? Options: a. The employee withholds the tax and pays it along
with the employer's portion; b. The employer withholds the tax and pays it only; c. The employee pays
the tax separately; d. The employe...
MN State Insurance Exam All Answers Correct
FICA Taxes
How are employee FICA taxes collected? Options: a. The employee withholds the tax and pays it along
with the employer's portion; b. The employer withholds the tax and pays it only; c. The employee pays
the tax separately; d. The employer pays the tax only
Answer: a. The employee withholds the tax and pays it along with the employer's portion;
Insurance Premiums
What is the adequate consideration for a monthly premium payment of $100 for an insurance policy?
Options: a. $50; b. $100; c. $260; d. $1,000
Answer: b. $100;
Non-Forfeiture Options
Which non-forfeiture option provides the least amount of coverage? Options: a. Reduced paid-up; b.
Extended term insurance; c. Cash surrender value; d. Paid-up life insurance
Answer: a. Reduced paid-up;
Insurance Application
What document must always be submitted for review by an insurance company to determine if it will
issue a policy? Options: a. The application; b. The proposal form; c. The policy form; d. The declaration
page
Answer: a. The application;
Certificate of Authority
, What is required before an insurer can operate in this state? Options: a. Certificate of Authority issued
by the state Insurance Department; b. License issued by the state Insurance Department; c. Permit
issued by the state Insurance Department; d. Registration issued by the state Insurance Department
Answer: a. Certificate of Authority issued by the state Insurance Department;
Prelicensing Education
How many hours of education are required per line of authority for prelicensing education? Options: a.
10 hours; b. 15 hours; c. 20 hours; d. 25 hours
Answer: c. 20 hours;
Guardianship
Who signs the application if an applicant is a minor? Options: a. The applicant themselves; b. Their
guardian; c. A parent or legal representative; d. A trusted friend
Answer: b. Their guardian;
Dividend Options
Which option is NOT a dividend option? Options: a. Reduced paid-up; b. Paid-up life insurance; c.
Extended term insurance; d. Reduced paid-up
Answer: d (Reduced paid-up is not a dividend option);
Tax Consequences
What are the tax consequences if an insured takes the cash value of $15,000 from a universal life policy
after contributing $12,000 in premiums? Options: a. $3,000 is taxable as ordinary income; b. $12,000 is
taxable as ordinary income; c. $3,000 is not taxable as ordinary income; d.$12,000 is not taxable as
ordinary income
Answer: a.$3,000 is taxable as ordinary income;
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