Which of the following is a common dividend option found in a participating life insurance policy? -
paid-up additions
Which of the following is a permissible IRA investment alternative? - Mutual funds
Becky is considering the purchase of a whole life policy on her own life. She is concerned tha...
RMI 211 Exam 4
Which of the following is a common dividend option found in a participating life insurance policy? -
paid-up additions
Which of the following is a permissible IRA investment alternative? - Mutual funds
Becky is considering the purchase of a whole life policy on her own life. She is concerned that if she
becomes disabled, paying premiums will become a burden. Which provision can Becky attach to her life
insurance policy to address this concern? - waiver-of-premium provision
Brad owns a cash value life insurance policy. Last year, the cash value increased by $300. Brad received
$100 in policyholder dividends on the policy last year which remained in the policy. Brad was the
beneficiary named in his grandmother's $50,000 life insurance policy. When she died this past year, Brad
received $50,000. How much taxable income relating to life insurance must Brad report for federal
income tax purposes? - $0
A contingency beneficiary in a life insurance policy has the right to - receive the policy proceeds if
the primary beneficiary dies before the insured
A legal reserve in life insurance is a result of - excess premiums in the early policy years being
invested at compound interest
All of the following are nonforfeiture options found in cash value life insurance policies EXCEPT -
reduction of premiums
All of the following are requirements that must be satisfied before premiums are waived under a wave-
of-premium provision EXCEPT - The insured must satisfy a 2-year waiting period
All of the following statements about ordinary life insurance are true EXCEPT - The face amount of
the policy is paid if the insured lives to age 65
, All of the following statements about the conversion of a term policy are true EXCEPT - Evidence
of insurability is required before a conversion is permitted
All of the following statements about the income tax treatment of individually-purchased life insurance
are true EXCEPT - premiums paid for the individual life insurance are a tax deductible expense
An immediate life annuity offers all of the following benefits EXCEPT - immediate annuity
payments are entirely exempt from federal income tax
Ann is considering the purchase of a life insurance policy with these characteristics: flexible premium
payments, the insurance and savings components are separate, the interest rate credited to the cash
value is tied to a changing market interest rate but a minimum interest rate is guaranteed, and a monthly
administrative fee is charged. Ann is considering buying - universal life insurance
Bridget started to fund a variable annuity. Three years later, she experienced financial difficulty. She
called her agent and cancelled the contract. The insurer returned all but 4 percent of the account
balance. The 4 percent kept by the insurer is a(n) - surrender charge
Consumer experts typically recommend all of the following rules when buying life insurance EXCEPT -
Ignore all factors other than cost
Daryl, age 42, quit his job. His employer offered a defined contribution pension plan, and the balance in
the account was $30,000 when Daryl quit. He can avoid immediate taxation of these funds by -
using an IRA rollover account
Disadvantages of life insurance settlement options include which of the following?
I. Higher yields can often be obtained elsewhere.
II. Life income options have limited usefulness at younger ages. - Both I and II
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