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KENTUCKY LIFE INSURA NCE
EXAM QUESTIONS WITH ALL
CORRECT ANSWER S
Question : The premiums paid by an employer for his
employee's group life insurance are usually considered to be
CORRECT ANSWER : Tax-deductible to the employer
Question : Which of these is NOT considered to be a cost
connected with an individual's death?
CORRECT ANSWER : Business expenses
Question : These are all accurate statements regarding
universal life insurance EXCEPT
CORRECT ANSWER : Policy loans are not permitted
Question : Which of these is NOT relevant when
determining the amount of personal life insurance needed?
CORRECT ANSWER : Local unemployment rate
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Question : Who elects the governing body of a mutual
insurance company?
CORRECT ANSWER : Policyholders
Question : Why would evidence of insurability be
required for a person insured with a variable universal life policy?
CORRECT ANSWER : The face amount is increased
Question : At what point are death proceeds paid in a joint
life policy?
CORRECT ANSWER : When the first insured dies
Question : What is considered a valid reason for small
businesses to insure the lives of its major shareholders?
CORRECT ANSWER : Fund a buy-sell agreement
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Question : Which action will trigger a penalty tax on
premature distributions from a modified endowment contract (MEC)?
CORRECT ANSWER : Policy loans
Question : Dividends from a mutual insurance company
are paid to whom?
CORRECT ANSWER : Policyowners
Question : Traditional individual retirement annuity
(IRA) distributions must start by
CORRECT ANSWER : April 1st of the year following
the year the participant attains age 70 1/2
Question : How are Roth IRA distributions normally
taxed?
CORRECT ANSWER : Distributions are received tax-
free
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Question : How can an insurance company minimize
exposure to loss?
CORRECT ANSWER : Reinsurance
Question : All of the following statements about
traditional individual retirement accounts are false
EXCEPT
CORRECT ANSWER : 10% penalty is applied to
withdrawals before age 59 1/2
Question : All of these statements concerning universal
life insurance are false EXCEPT
CORRECT ANSWER : Policy indicates how much of
the premium is used toward company expenses
Question : 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?
CORRECT ANSWER : Income taxes plus a 10% penalty
tax on $30,000