Wrong Answers

Question 1

A ______ ______ is the signed document that starts the free-look period.

Answer 1

delivery receipt

Question 2

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

Answer 2

twisting

Question 3

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Answer 3

Determined by the terms of the policy

Under a basic hospital/surgical expense policy, the amount of the patient’s claim payment will be based on the terms of the policy.

Question 4

Common accident deductible

Answer 4

A common accident deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.

Question 5

A characteristic of Preferred Provider Organizations (PPOs) would be:

Answer 5

Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.

Question 6

HRA

Answer 6

HRA plans are employer-funded medical reimbursement plans.

Question 7

Insurance policies are considered aleatory contracts because

Answer 7

performance is conditioned upon a future occurrence
Insurance contracts are aleatory. This means there is an element of chance and potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.

Question 8

Generally, how long is a benefit period for a Major Medical Expense Plan?

Answer 8

One year

Question 9

A Health Reimbursement Arrangement MUST be established:

Answer 9

HRAs are employer-established benefit plans that must be funded by the employer.

Question 10

Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?

Answer 10

Correct. In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100.

Question 11

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will:

Answer 11

The correct answer is “continue coverage but exclude the heart condition.” If the insured did not cite the condition on the application and the insurer did not exclude the condition, the pre-existing condition provision still applies. Exclusions are subject to the “time limit on certain defenses” provision, however.

Question 12

A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of

Answer 12

A contract of adhesion is a contract offered intact to one party by another under circumstances requiring the second party to accept or reject the contract in total without having the opportunity to bargain over the wording. Insurance policies are contracts of adhesion and, as such, are construed strictly against the party writing them (i.e., the insurer).

Question 13

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Answer 13

The correct answer is “Waiver of Premium rider”. If a policyowner covered under an accident and health policy wanted to ensure the policy will continue if they ever become totally disabled, they would want to add a waiver of premium rider.

Question 14

Which of the following is NOT included in the policy face?

Answer 14

The exclusions section is NOT included in the policy face (first page of an insurance policy).

Question 15

The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the:

Answer 15

The Insuring clause states the amount of benefits to be paid in an Accident and Health policy.

Question 16

Under an individual Health Insurance policy, the Time Limit of Certain Defenses provision states that nonfraudulent misstatements first become incontestable two years

Answer 16

Under the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable two years from the date of the policy was issued.

Question 17

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

Answer 17

Most long-term care policies pay on a reimbursement (or expense-incurred) basis, up to the policy limits.

Question 18

When does a Probationary Period provision become effective in a health insurance contract?

Answer 18

The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.

Question 19

Insurance policies are offered on a “take it or leave it” basis, which make them:

Answer 19

Contracts of Adhesion

Question 20

A Disability Income policy that only the policyowner can terminate and which the rates will never go up is considered to be

Answer 20

A Disability Income Policy that only the policyowner can terminate and on which the rates will never increase is a Noncancellable policy.

Question 21

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury
Loss of the spleen due to an accidental injury
Partial paralysis due to a stroke
Loss of life due to a heart attack

Answer 21

Loss of eyesight due to an accidental injury

Question 22

A life insurance policy would be considered a wagering contract WITHOUT:

Answer 22

insurable interest

Question 23

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Answer 23

Group plans where employees pay a portion of the premiums are called contributory plans.

Question 24

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with a rating
Decline the applicant
Issue the policy with an altered Time of Payment of Claims provision
Issue the policy with a diabetes exclusion

Answer 24

he insurance company may take all of these actions EXCEPT issue the policy with an altered Time of Payment of Claims provision.

Question 25

The Notice of Claims provision requires a policyowner to:

Answer 25

notify an insurer of a claim within a specified time

Question 26

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features? Consideration Unilateral Adhesion Aleatory

Answer 26

Insurance contracts are aleatory in that the amount the insured will pay in premiums is unequal to the amount that the insurer will pay in the event of a loss.

Question 27

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?

Answer 27

he time of payment for claims is usually specified in different policies as 60 days, 45 days, or 30 days. However, if the claim involves disability income benefits, the benefits must be paid not less frequently than monthly.

Question 28

The reason for a business having a Business Overhead Expense Disability Plan is to cover:

Answer 28

The correct answer is "fixed business expenses". The reason for a business having a Business Overhead Expense Disability Plan is to cover fixed business costs in the event the owner becomes disabled.

Question 29

Which of these statements concerning an individual Disability Income policy is TRUE?

Answer 29

Disability Income policies typically contain an Elimination period.

Question 30

Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:

Answer 30

The correct answer is "probability of making timely premium payments". The purpose of these reports is to provide a picture of an applicant's general character and reputation, mode of living, finances, and any exposure to abnormal hazards.

Question 31

P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?

Answer 31

Disability income benefits that derive from an individual policy which was paid entirely by the policyowner is not subject to federal income tax.

Question 32

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

Answer 32

When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is known as reimbursement.

Question 33

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a:

Answer 33

A group-owned insurer whose primary activity consists of assuming and spreading the liability risks of its members is called a risk retention group.

Question 34

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

Answer 34

The correct answer is "31". The grace period is a minimum of 31 days for policies that are paid for on an annual basis.

Question 35

Payment of Claims provision

Answer 35

In a health policy, the Payment of Claims provision states that the insured and insurance company will share the cost of covered losses.

Question 36

R becomes disabled and owns an individual Disability Income policy. When is R eligible to receive disability benefits?

Answer 36

Upon satisfying the elimination period requirement The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.

Question 37

assignment of benefits

Answer 37

An assignment of benefits of a Health Policy transfers payments to someone other than the policyowner.

Question 38

exclusion

Answer 38

An exclusion is a provision that entirely eliminates coverage for a specified risk, such as an act of war or aviation.

Question 39

Health Maintenance Organizations (HMO's)

Answer 39

Health Maintenance Organizations (HMO's) traditionally provide services to its members at its own local health care facilities.

Question 40

What is the primary factor that determines the benefits paid under a disability income policy?

Answer 40

The major factor in determining the benefit amount paid under a disability income policy is wages.

Question 41

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is:

Answer 41

The correct answer is "100%". Most noncontributory group health plans require 100% participation by eligible employees.

Question 42

Which statement concerning the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is INCORRECT?

Answer 42

Continued insurance coverage under COBRA is not available to employees who quit their jobs

Question 43

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

Answer 43

A new employee must sign an enrollment card during the open enrollment period

Question 44

A producer has influenced an existing policyowner to convert an existing whole life policy to Reduced Paid-up insurance. The producer then sells the policyowner a new universal life policy. This transaction is called a(n):

Answer 44

Taking an existing whole life policy and converting it to reduced paid-up insurance while immediately taking out a new life policy is considered a form of replacement, which is a heavily regulated transaction.

Question 45

A policyowner has a right to return a life insurance policy within ___ days for a full refund when replacement is involved.

Answer 45

When a life insurance or annuity replacement policy is sold, the policyowner has a right to return the policy for a full refund of premium within 30 days.

Question 46

The standard grace period for premium payments on all individual life insurance policies issued in Minnesota is ___ month(s).

Answer 46

An individual life insurance policy issued in Minnesota MUST have a grace period for premium payment of 1 month.

Question 47

An example of replacement is

Answer 47

Canceling a term life policy to purchase a whole policy is an example of replacement.

Question 48

Lapsed individual life insurance may be reinstated at any time within

Answer 48

Lapsed individual life insurance may be reinstated at any time within 3 years.

Question 49

_________ can be defined as "making an unfair comparison of two insurance policies".

Answer 49

The correct answer is "Misrepresentation". It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements. Committing this illegal act is called misrepresentation.

Question 50

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

Answer 50

twisting

Question 51

What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive?

Answer 51

The Primary Insurance Amount (PIA) determines the full amount of retirement benefits for an eligible person.

Question 52

To be eligible for Social Security disability benefits, an employee must be unable to perform:

Answer 52

any occupation

Question 53

Which of the following does Social Security NOT provide benefits for?

Answer 53

Dismemberment

Question 54

One becomes eligible for Social Security disability benefits after having been disabled for:

Answer 54

The correct answer is "5 months". Disability income benefits are paid to the covered worker in the amount of the PIA after a 5-month waiting period.

Question 55

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

Answer 55

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

Question 56

In a qualified retirement plan, the yearly contributions to an employee's account:

Answer 56

are restricted to maximum levels set by the IRS

Question 57

What type of life insurance are credit policies issued as?

Answer 57

The type of insurance used is decreasing term, with the term matched to the length of the loan period (though usually limited to 10 years or less) and the decreasing insurance amount matched to the declining loan balance.

Question 58

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

Answer 58

The correct answer is "The employee". The participating employee normally applies for and owns a 403(b) tax-sheltered annuity.

Question 59

On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium. On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producer then take?

Answer 59

In this situation, the producer should deliver the policy and obtain the premium payment along with a signed health statement.

Question 60

Reduced Paid-Up

Answer 60

A Reduced Paid-Up option would provide continuing cash value build-up.

Question 61

K is an insured under a life insurance policy owned by a third party. Which of these statements is true?

Answer 61

When a life insurance policy is owned by a third party, the insured has no ownership rights.

Question 62

A Life insurance policyowner would like to take out a policy loan against the cash value in his Whole Life policy. The interest rate applied to this loan may vary over time. This is referred to as a(n) ________ rate loan.

Answer 62

The interest rate on a Variable rate cash value loan may vary over time.

Question 63

How are Roth IRA distributions normally taxed?

Answer 63

Distributions are received tax-free

Question 64

Entire Contract Provision

Answer 64

The entire contract provision, found at the beginning of the policy, states that the policy document, the application (which is attached to the policy), and any attached riders constitute the entire contract. Nothing may be "incorporated by reference," meaning that the policy cannot refer to any outside documents as being part of the contract.

Question 65

Which type of life policy contains a monthly mortality charge as well as self-directed investment choices?

Answer 65

Variable Universal Life is comprised of monthly mortality charges and self directed investment choices.

Question 66

Which type of plan allows an employer to give money to an employee for buying a life insurance policy and also permits the employee to select the beneficiary?

Answer 66

The correct answer is "Split-dollar". A split-dollar plan is an arrangement where an employer and an employee share in the cost of purchasing a life insurance policy on the employee. The employee is also allowed to name the policy beneficiary.

Question 67

A Nonforfeiture clause gives the policyowner

Answer 67

A nonforfeiture clause stipulates that a policyowner can receive full or partial benefits or a partial refund of premiums after a lapse due to non-payment.

Question 68

J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value?

Answer 68

The correct answer is "20-pay Life". The shorter the pay period, the faster the cash value growth.

Question 69

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

Answer 69

There is no tax withheld on an IRA transfer.

Question 70

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid:

Answer 70

There is no federal tax withholding involved in a transfer of funds from one qualified plan into another. Rollovers, however, involve a 20% withholding. Once the rollover takes place to the new custodian, the remainder of the distribution is made.

Question 71

Which of these is NOT an element of Life insurance premiums?

Answer 71

he correct answer is "Morbidity rate". Morbidity rate is NOT an element of life insurance premiums.

Question 72

Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?

Answer 72

The correct answer is “Variable life.” The variable nature of a variable whole life insurance is its death benefit. However, if investment performance is poor, the death benefit will not go lower than the policy's guaranteed minimum.

Question 73

Which of these actions should a producer take when submitting an insurance application to an insurer?

Answer 73

The correct answer is "Inform insurer of relevant information not included on the application". One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.

Question 74

M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the:

Answer 74

he correct answer is "policy proceeds". If not repaid by the time the insured dies, the loan balance and any interest accrued are deducted from the policy proceeds at the time of claim.

Question 75

A Limited-Pay Life policy has:

Answer 75

In a Limited-Pay Life policy, premium payments are limited to a specified number of years.

Question 76

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Answer 76

The Life Income settlement option pays a specified amount to the annuitant with no residual value payable to a beneficiary.

Question 77

Insurance policies are considered aleatory contracts because

Answer 77

Insurance contracts are aleatory. This means there is an element of chance and potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.

Question 78

The amount of coverage on a group CREDIT life policy is limited to:

Answer 78

With a group credit life policy, the amount of insurance on the life of a debtor is limited to the total amount of the insured's loan.

Question 79

A sole proprietor may use this plan ONLY if the employees of this business are included.

Answer 79

The correct answer is "Keogh Pension Plan". A Keogh Plan may be used by a sole proprietor only if the employees of the business are included.

Question 80

Which is true concerning a Variable Universal Life policy?

Answer 80

With Variable Universal Life, the policyowner controls the investment of cash values and selects the timing and amount of premium payments.

Question 81

How are surrender charges deducted in a life policy with a rear-end loaded provision?

Answer 81

In a policy with a rear-end loaded provision, surrender charges are deducted when the policy is discontinued.

Question 82

A whole life insurance policyowner does not wish to continue making premium payments. Which of the following enables the policyowner to sell the policy for more than its cash value?

Answer 82

The correct answer is "Life settlement contract". A Life settlement contract allows a policyowner to sell a life insurance policy for more than its cash value.

Question 83

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

Answer 83

The correct answer is "Conditional". A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.

Question 84

What is the underlying concept regarding level premiums?

Answer 84

The early years are charged more than what is needed

Question 85

A Term Life rider offers the insured

Answer 85

The correct answer is "additional life coverage". A Term Life rider offers the insured additional life coverage.

Question 86

Which of these is an element of a Variable Life policy?

Answer 86

The correct answer is "A fixed, level premium". Variable Whole Life policies have a fixed, level premium.

Question 87

What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years?

Answer 87

The correct answer is "Family Maintenance Policy". A Family Maintenance Policy pays a monthly income from the date of death of the insured to the end of the preselected period. The payment of the face amount of the policy is payable at the end of such preselected period.

Question 88

T took out a $50,000 life insurance policy with an Accidental Death and Dismemberment rider. Five years later, T commits suicide. How much will the insurer pay?

Answer 88

The correct answer is "$50,000". The suicide occurred outside the Suicide clause period (normally 1-2 years), thus the face amount will be paid.

Question 89

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called:

Answer 89

Life insurance that covers an insured's whole life with level premiums paid over a limited time is called Limited Pay Life.

Question 90

K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she chose?

Answer 90

In this situation, Paid-Up Option should be selected.

Question 91

Which statement is correct regarding the premium payment schedule for whole life policies?

Answer 91

With whole life insurance, premiums are payable throughout the insured's lifetime, and coverage continues until the insured's death.

Question 92

The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n):

Answer 92

The insuring clause or provision sets forth the company's basic promise to pay benefits upon the insured's death.

Question 93

What type of life policy covers two lives and pays the face amount after the first one dies?

Answer 93

A policy that promises to pay the face amount on the death of first of two lives covered by the policy is called a Joint Life Policy.

Question 94

K is the insured and P is the sole beneficiary on a life insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Answer 94

Under the Common Disaster provision, proceeds will be payable to K's estate if P dies within a specified time.

Question 95

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

Answer 95

The correct answer is "If Tom's employment is terminated, 20% of the funds would be forfeited". In this situation, 80% "vested" means that 20% of the funds could be forfeited if Tom's employment is terminated.

Question 96

The advantage of reinstating an original life policy is

Answer 96

The advantage of reinstating an original life policy is the premiums are based on a younger age.

Question 97

Which of these are NOT an example of a Nonforfeiture option?

Answer 97

Life Income

Question 98

At what point does an informal agreement become a binding contract?

Answer 98

When consideration is provided by one of the parties to the contract

Question 99

Typically a life insurance death benefit is paid by a lump-sum payment. A(n) ___________ option is a method of distributing a Life Insurance policy's death benefit OTHER than by a lump sum payment.

Answer 99

A settlement option is a method of distributing a Life Insurance policy's death benefit OTHER than a lump sum payment.

Question 100

K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable?

Answer 100

The correct answer is "Level". A level term policy pays the same benefit amount if death occurs at any point during the term. Level term policies may be renewable.

Question 101

he option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n):

Answer 101

The correct answer is "Accidental Death and Dismemberment (AD&D) rider". An Accidental Death and Dismemberment (AD&D) rider provides an additional death benefit for a limited period of time at the lowest possible cost.

Question 102

Insurance policies are offered on a "take it or leave it" basis, which make them:

Answer 102

The correct answer is "Contracts of Adhesion". Because insurance policies are offered on a "take it or leave it" basis, they are referred to as Contracts of Adhesion.

Question 103

When is the face amount of a Whole Life policy paid?

Answer 103

The face amount of a Whole Life policy will be paid when the insured dies or on maturity of the policy, whichever occurs first.

Question 104

Taking receipt of premiums and holding them for the insurance company is an example of:

Answer 104

Taking receipt of premiums and holding them for the insurance company is an example of fiduciary responsibility.

Question 105

What advantage does the renewability feature give to a term policy?

Answer 105

The correct answer is "The insured may extend the coverage period". The advantage a renewability feature gives to the insured is it allows him/her to extend the coverage period. Usually a premium increase is involved upon renewal.

Question 106

____ of personal life insurance premiums is usually deductible for federal income tax purposes.

Answer 106

The correct answer is "0%". In general, personal life insurance premiums are NOT deductible for federal income tax purposes.

Question 107

Under a trustee group life policy, who would be eligible for a certificate of coverage?

Answer 107

An employee would be a certificate holder under a trustee group life policy.

Question 108

If a corporation pays the premium on a group life policy for its employees, the corporation is required to report how much additional taxable income for each employee?

Answer 108

The correct answer is "Nothing". Employers cannot report additional taxable income to employees covered under a group life policy paid for by the employer.

Question 109

If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?

Answer 109

The correct answer is "Contributory". Employees share in the premium costs with contributory plans.

Question 110

A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a:

Answer 110

A group-owned insurer whose primary activity consists of assuming and spreading the liability risks of its members is called a risk retention group.

Question 111

What year was the McCarran-Ferguson Act enacted?

Answer 111

The correct answer is "1945". The McCarran-Ferguson Act was enacted in 1945 and made it clear that continued regulation of insurance by the states was in the public's best interest.

Question 112

Dividends payable to a policyowner are

Answer 112

Dividends payable to a policyowner are declared by the insurance company.

Question 113

How does an indexed annuity differ from a fixed annuity?

Answer 113

An indexed annuity differs from a fixed annuity in that indexed annuity owners may receive credited interest tied to the fluctuations of the linked index.

Question 114

When a policy pays dividends to its policyholders, it is said to be

Answer 114

A participating policy is one in which insurance policies pay out dividends to the policyholders.

Question 115

An immediate annuity consists of a:

Answer 115

An immediate annuity has a single premium.

Question 116

The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own?

Answer 116

The correct answer is "Flexible Installment Deferred". This is an example of a Flexible Installment Deferred annuity.

Question 117

Which type of contract liquidates an estate through recurrent payments?

Answer 117

A contract that provides for the liquidation of all or part of an estate through periodic payments is known as an annuity.

Question 118

Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees?

Answer 118

The correct answer is "Portion of the premiums paid for by the employer may be a tax deduction". In a contributory plan, the employer may file a tax deduction for its share of the premium costs.

Question 119

K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase?

Answer 119

This annuity was purchased with one payment and begins immediately. It also covers K and her spouse for the rest of their lives. This annuity is classified as Single Premium Immediate Joint with Survivor Annuity.

Question 120

Which of the following are Equity Indexed annuities typically invested in?

Answer 120

The correct answer is "S&P 500". An indexed annuity is a type of tax-deferred annuity whose credited interest is linked to an equity index — typically the S&P 500.

Question 121

Which of the following statements about noncontributory employee group life insurance is FALSE?

Answer 121

Noncontributory employee group life insurance plans must cover ALL eligible employees at all times.

Question 122

Group life insurance policies are generally written as:

Answer 122

The correct answer is "annually renewable term". Group life insurance policies are generally written as annually renewable term.