Fin 341 Last Test
Terms in this set (9)
Bill is attempting to determine how much life insurance to purchase. He has two dependent children and a wife does not work at home....
A) blackout period. B) dependency period.
C) emergency period. D) readjustment period.
All of the following statements about current assumption whole life insurance are true EXCEPT:
A. An accumulation account is credited with an interest rate based on present market conditions.
B. It is a form of participating whole life insurance that pays annual dividends.
C. Under the low-premium version, the premium is subject to change after an initial guaranteed period.
D. Under the high-premium version, premium may vanish after the period.
It is a form of participating whole life insurance that pays annual dividends
Which of the following statements about the guaranteed purchase option is true?
A. an insured usually has 24 months to exercise an option.
B. The option cannot be exercised until the insured reaches 40.
C. The amount of life insurance that can be purchased at each option is limited to 10 percent of the face amount of the basic policy.
D. The additional coverage can be purchased without demonstrating insurability.
The additional coverage can be purchased without demonstrating insurability
A. Cash Value
B. Reduced paid-up insurance
C. Paid up additions
D. Extended term insurance
LIONEL=REDUCED PAID UP
All of the following statements about the surrender cost index for measuring the cost of life insurance are true EXCEPT:
A. It is based on a specific time, such 10 0r 20 yrs.
B. It takes into account the settlement options available in the policy.
C. It requires that annual premiums be accumulated at a specified interest rate.
D. It takes the amount and timing of each dividend into consideration.
It takes into account the settlement options available in the policy.
All of the following statements about the income tax treatment of individually-purchased life insurance are true except:
A. Policy owner dividends are received tax-free.
B. the annual increase in cash value is not taxable while the policy remains in force.
C. premiums paid for individual life insurance are a tax deductible expense.
D. life insurance proceeds paid to a beneficiary in a lump-sum are received tax-free.
Premiums paid for individual life insurance are a tax deductible expense.
All of the following statements about the tax treatment of Health Savings Accounts are true EXCEPT:
A. Contributions to a qualified HSA are tax deductible
B. Distributions from a qualifies HSA used to fund medical expenses are taxable income.
C. Distribution from a qualifies HSA prior ro age 65 for non-medical purposes are subject to a 10% tax.prescrived
Distributions form a qualified HSA used to fund medical expenses are taxable income
Which of the following statements regarding the Health Insurance Portability and Accountability Act is true?
A. It guarantees the availability of group heath insurance to small employers.
B. It requires employer to provide at least a min. level of health benefits prescribed by law.
C. It requires giving credit for previous coverage with respect to any preexisting conditions exclusion found in a new health plan.
D. It limites preexisting conditions exclusions to 90 days.
It requires giving credit for previous coverage with respect to any preexisting conditions exclusion found in a health plan.
All of the following statements concerning a Roth 401K plan are true except:
A. After-tax dollars are used to fund the plan
B. Investment earnings accumulate on a tax-free basis.
C. Employees at all income levels may contribute to the plan, but annual contributions are limited.
D.Qualified distributions at retirement are fully taxable.
Qualified distributions at retirement are fully taxable
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