Question: If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?

Answer: a) It is a percentage of the cash value and decreases over time.

Question: All of the following are true of an annuity owner EXCEPT

Answer: c) The owner must be the party to receive benefits.

Question: What is the waiting period on a Waiver of Premium rider in life insurance policies?

Answer: d) 6 months

Question: After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?

Answer: d )Surrender charge

Question: What is the purpose of a conditional receipt?

Answer: c) It is intended to provide coverage on a date prior to the policy issue.

Question: Who is the owner and who is the beneficiary on a Key Person Life Insurance policy?

Answer: c) The employer is the owner and beneficiary.

Question: The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Answer: b) Reduction of premium

Question: What limits the amount that a policyowner may borrow from a whole life insurance policy?

Answer: a) Cash value

Question: Joe, Larry, and Curly own a small business. They have made a legal arrangement which states that if one of them dies or becomes disabled, the other two will be able to buy the partner’s shares. Which term best describes this arrangement?

Answer: c) Business Continuation

Question: The type of policy that can be changed from one that does not accumulate cash value to the one that does is a

Answer: c) Convertible Term Policy.