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1. Which of the following statements about participating life insurance is true?
A) The insured must be the policyowner.
B) The insurer must be a stock company.
C) Policyowners may be entitled to receive dividends.
D) Policyowners are assessed monthly for losses.
2. The free-look period provided in a life insurance policy is usually:
A) 45 days
B) 31 days
C) 60 days
D) 10 days
3. The needs approach to personal life insurance planning includes the creation of an emergency reserve fund.
This fund is designed primarily to:
A) Pay for college tuition and books
B) Cover the cost of unexpected expenses
C) Pay off an existing mortgage
D) Provide retirement income
4. A policyholder uses a Section 1035 exchange to replace an existing life insurance policy. If the new policy is later surrendered, the gain realized on termination is taxed as:
A) A capital gain
B) Ordinary income plus a 10% surcharge
C) Ordinary income
D) A deferred capital gain
5. The Maryland Insurance Administration is an agency of the:
A) Maryland General Assembly
B) National Association of Insurance Commissioners
C) Federal government
D) State government
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: B | Question # 4 Answer: C | Question # 5 Answer: D |
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