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MN State Insurance Exam All Answers Correct

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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...

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  • July 18, 2024
  • 11
  • 2023/2024
  • Exam (elaborations)
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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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