Question: Under a Modified Endowment Contract, what are the likely tax consequences?

Interest on policy loans is tax deductible

Premium payments are tax deductible

Pre-death distributions will become taxable

Cash value cannot be surrendered early

Answer: Pre-death distributions will become taxable

Question:

Answer: The shorter the payment period, the higher the premium

Question: Which of these riders will pay a death benefit if the insured’s spouse dies?

Guaranteed Insurability rider

Family term insurance rider

Family whole insurance rider

Payor benefit rider

Answer: Family term insurance rider

Question: All of these are characteristics of a universal life insurance policy EXCEPT

Flexible death benefit

All of these are characteristics of a universal life insurance policy EXCEPT

Flexible death benefit

Fixed surrender value

Flexible premiums

Builds cash value

Answer: Fixed surrender value

Question:

Answer: Policyowner has the right to select the investment which will provide the greatest return

Question: Level premium permanent insurance accumulates a reserve that will eventually

equal the face amount of the policy

pay a dividend to the policyowner

require the policyowner to make periodic withdrawals

become larger than the face amount

Answer: equal the face amount of the policy

Question: Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?

Adjustable life policy

Modified life policy

Endowment policy

Universal life policy

Answer: Endowment policy

Question:

Answer: Equity index whole life

Question: A Renewable Term Life insurance policy can be renewed

at a predetermined date or age, regardless of the insured’s health

only if the insured provides evidence of insurability

anytime at the policyowner’s request

typically with no change in premium

Answer: at a predetermined date or age, regardless of the insured’s health

Question: A renewable Term Life insurance policy allows the policyowner the right to renew the policy

at anytime the policyowner chooses

as many times as the policyowner chooses

paying the same premium as before the renewal

without producing proof of insurability

Answer: without producing proof of insurability