During the funding period, the premiums paid for a variable annuity are used to purchase A) annuity units. B) immediate participation shares. C) mutual fund shares. D) accumulation units. ANSWER Answer: D
Date: September 19th, 2020
Which of the following statements is (are) true with respect to a joint-and-survivor annuity? I. Some joint-and-survivor annuities reduce the income payment after the first annuitant dies. II. No payments are made after the first annuitant dies. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Bridget started to fund a variable annuity. Three years later, she experienced financial difficulty. She called her agent and cancelled the contract. The insurer returned all but 4 percent of the account balance. The 4 percent kept by the insurer is a(n) A) account administration fee. B) investment management fee. C) front-end load. D) surrender […]
Date: September 19th, 2020
Which of the following statements is (are) true with respect to variable annuities? I. The price at which accumulation units can be purchased fluctuates during the funding period. II. The value of annuity units fluctuates over time. A) I only B) II only C) both I and II D) neither I nor II […]
Date: September 19th, 2020
Carl and Carol Williams, a married couple, are doing some estate planning. Upon his death, Carl plans to leave $1,000,000 in property to his wife. This amount will reduce the value of Carl’s gross estate and will be taxed later when Carol dies. This reduction of the gross estate is called the A) unified tax […]
Date: September 19th, 2020
Actuaries at Term Life Insurance Company calculated the net single premium per thousand for a five-year term policy for a man age 32 to be $5.04. To calculate the net level premium for this policy, the net single premium should be A) divided by 5. B) divided by the future value life annuity due factor […]
Date: September 19th, 2020
Paul is shopping for a life insurance policy. An agent asked Paul if he would like to purchase a participating policy. What is a “participating” policy? A) a policy which has a cash value B) a policy which pays dividends C) a policy which invests in common stock D) a policy which provides for an […]
Date: September 19th, 2020
The net premiums collected by a life insurer for a particular block of policies, plus interest income at an assumed rate, less assumed death benefits paid is called the A) cash value. B) retrospective reserve. C) net amount at risk. D) prospective reserve. ANSWER Answer: B
Date: September 19th, 2020
All of the following statements about the income tax treatment of individually-purchased life insurance are true EXCEPT A) policyowner 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 […]
Date: September 19th, 2020
The average annual rate of return on a cash-value policy if it is held a specified number of years is called the policy’s A) net present value. B) interest-adjusted cost. C) benchmark cost. D) Linton yield. ANSWER Answer: D
Date: September 19th, 2020
