Deck 9: Insurance Planning Basics

Question 1

Taxation of a withdrawal from an annuity contract is on a:

A)First-in,first-out basis.
B)First-in,last-out.
C)Last-in,first-out basis.
D)Last-in,last-out basis.

Answer 1

C

Question 2

IRC Section 1035 allows the owner of an annuity contract to exchange an existing annuity contract for a new one,without:

A)Paying long-term capital gains tax on the investment gains in the current contract.
B)Paying ordinary income tax on the investment basis in the current contract.
C)Paying ordinary income tax on the investment gains in the current contract.
D)Paying short-term capital gains tax on the investment gains in the current contract.

Answer 2

C

Question 3

Loss assessment coverage is provided under:

A)HO-3.
B)HO-4.
C)HO-5.
D)HO-6.

Answer 3

D

Question 4

The owner of a condominium needs which of the following insurance policies?

A)HO-3.
B)HO-4.
C)HO-5.
D)HO-6.

Question 5

Comprehensive losses are damages caused by events other than:

A)Breakage of glass.
B)Collision.
C)Theft.
D)Vandalism.

Question 6

If an individual receives a Social Security disability benefit from the government,which benefit from an insurance company may be terminated or reduced?

A)Cost-of-Living Adjustment (COLA)benefit.
B)Guaranteed Renewable Disability benefit.
C)Option to Purchase Additional Insurance benefit.
D)Social Insurance Substitute benefit.

Question 7

The personal liability umbrella policy requires the policy owner to maintain minimum levels of:

A)Automobile insurance.
B)Directors' and officers' insurance.
C)Errors and omissions insurance.
D)Malpractice insurance.

Question 8

A contract that pays the insured a specific daily amount (based on scheduled limits)for services to assist with the activities of daily living is:

A)Annuity insurance.
B)Disability insurance.
C)Long-term care insurance.
D)Medical insurance.