Question 1

She has a $200,000 whole life policy with a $50,000 cash value. She wishes to borrow $30,000 for the

purchase of a new van. Which of the following is TRUE in this situation?

Options :

A : Loans can only be taken for hardship situations.

B : Whole life policies do not have any loan provisions.

C : This type of loan is interest free.

D : If the loan is not repaid, the net death will be reduced

Answer: D

Question 2

A Key Person Disability Income Policy pays benefits to the

Options :

A : spouse.

B : employee.

C : dependent.

D : employer.

Answer: D

Question 3

An annuitant dies during the accumulation period. What happens to the cash in the annuity?

Options :

A : it is paid to the beneficiary

B : it is paid to the IRS

C : it is paid into the estate

D : the company keeps it

Answer: A

Question 4

What are the tax implications of an insured's health insurance costs if the insured is self employed with an S

corporation, has a net profit for the tax year, and is unmarried?

Options :

A : The insured can pay for 100% of health insurance costs with pre-tax income.

B : The insured can deduct 70% of all health insurance costs from his gross income.

C : The insured can deduct 100% of all health insurance costs from his gross income.

D : The insured can pay for 70% of health insurance costs with pre-tax income.

Answer: C

Question 5

When selling an insurance policy in Pennsylvania, the producer must do all of the following EXCEPT

Options :

A : submit premiums within the normal course of business.

B : emphasize the benefits of the Guaranty Association.

C : protect any non-public or personal information about the applicant

D : provide a notice of information practices to applicants.

Answer: B

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