Massachusetts Life Insurance Final Exam Questions and Answers Graded A+
Question :What is the federal income tax liability of a death
benefit paid from a health insurance policy to a named beneficiary?
CORRECT ANSWER :Benefits are not taxable
Question :Medicare A does not provide coverage for
CORRECT ANSWER :The first 3 pints of blood
Question :What type of risk involves the potential for loss
AND gain?
CORRECT ANSWER :Speculative
Question :Which of these is not considered a preventive
service in a dental plan?
CORRECT ANSWER :Fillings
Question :Which event triggers a deferred annuity to start
making benefit payments to the annuitant?
CORRECT ANSWER :When the contract is annuitized
Question :Beginning Jan 1, 2014, the restricted annual limit
for plans under the Affordable Care Act will be
CORRECT ANSWER :No limit
Question :When does the producer give a premium receipt for
a life insurance application?
CORRECT ANSWER :When the initial premium has been
paid with the application
Question :Which of these is NOT considered a Federal
punishment for unfair and deceptive insurance practices?
CORRECT ANSWER :Community service
Question :A nonparticipating whole life insurance policy was
surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value?
CORRECT ANSWER :Policyowner receives $16,000 tax
free and $4,000 is ordinary income
Question :A policyowner pays the first annual premium for a
$50,000 life insurance policy and dies one more after the policy effective date. Which of these statements is normally true?
CORRECT ANSWER :The beneficiary receives $50,000
income tax-free
Question :These are all accurate statements regarding
universal life insurance EXCEPT
CORRECT ANSWER :Policy loans are not permitted
Question :Which of the following guidelines does NOT apply
under the pregnancy provision of the Civil Rights Act?
CORRECT ANSWER :Post-termination extensions of
medical benefits must apply equally to pregnancy
Question :Which of the following is excluded in a medical
expense plan?
CORRECT ANSWER :Military duty
Question :Which of the following disability income
provisions allows two periods of disability to be counted as one?
CORRECT ANSWER :Recurrent disability
Question :Which of the following is a TRUE statement
regarding universal life insurance?
CORRECT ANSWE R:Policy indicates how much of each
premium is used toward company expenses
Question :Who typically makes the purchase payments in an
individual annuity?
CORRECT ANSWER :Owner
Question :Emily is disabled. In order to become eligible for
Social Security disability income benefits, she must be
CORRECT ANSWER :fully insured, according to Social
Security