Kentucky Life Insurance State Exam Practice

The premiums paid by an employer for his employee's group life insurance are usually

considered to be - ✔✔Tax-deductible to the employer

Which of these is NOT considered to be a cost connected with an individual's death? -

✔✔Business expenses

These are all accurate statements regarding universal life insurance EXCEPT -

✔✔Policy loans are not permitted

Which of these is NOT relevant when determining the amount of personal life insurance

needed? - ✔✔Local unemployment rate

Who elects the governing body of a mutual insurance company? - ✔✔Policyholders

Why would evidence of insurability be required for a person insured with a variable

universal life policy? - ✔✔The face amount is increased

At what point are death proceeds paid in a joint life policy? - ✔✔When the first insured

dies

What is considered a valid reason for small businesses to insure the lives of its major

shareholders? - ✔✔Fund a buy-sell agreement

Which action will trigger a penalty tax on premature distributions from a modified

endowment contract (MEC)? - ✔✔Policy loans

Dividends from a mutual insurance company are paid to whom? - ✔✔Policyowners

Traditional individual retirement annuity (IRA) distributions must start by - ✔✔April 1st of

the year following the year the participant attains age 70 1/2

How are Roth IRA distributions normally taxed? - ✔✔Distributions are received tax-free

How can an insurance company minimize exposure to loss? - ✔✔Reinsurance

All of the following statements about traditional individual retirement accounts are false

EXCEPT - ✔✔10% penalty is applied to withdrawals before age 59 1/2

All of these statements concerning universal life insurance are false EXCEPT -

✔✔Policy indicates how much of the premium is used toward company expenses

A 55 year old recently received a $30,000 distribution from a previous employer's 401k

plan, minus $10,000 withholding. Which federal taxes apply if none of the funds were

rolled over? - ✔✔Income taxes plus a 10% penalty tax on $30,000

For insurance purposes, similar objects which are exposed to the same perils are

referred to as - ✔✔Homogeneous exposure units

In an individual retirement account (IRA), rollover contributions are - ✔✔Not limited by

dollar amount

What is the maximum number of employees (earning at least $5,000) that an employer

can have in order to start a SIMPLE retirement plan? - ✔✔100

Which statement concerning a decreasing term life policy is accurate? - ✔✔Face

amount decreases over time

All of these are considered features of whole life insurance EXCEPT - ✔✔Initial

premium is lower than for an equivalent amount of term insurance

An employer that offers a qualified retirement plan to its employees is eligible to -

✔✔Make tax-deductible contributions to the plan

The insurance coverage in a variable life insurance policy may fluctuate based on the

value of - ✔✔Its underlying investments

How long is a person covered for under a limited pay whole life policy? - ✔✔Until age

100

When does an insured stop making payments under a thirty-payment whole life policy?

- ✔✔When the insured dies or 30 years from the policy's inception, whichever comes

first