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MN LIFE PRODUCER EXAM | QUESTIONS & ANSWERS (VERIFIED) | LATEST UPDATE | GRADED A+, Exams of Insurance law

Rasmussen College - MinnesotaInsurance law

Accelerated Benefits Rider Correct Answer: -pays 50-80% of death benefit -insured retains policy ownership & can designate beneficiary -beneficiary gets remainder at insured's death Viatical Settlement Correct Answer: -viatical settlement provider buys policy from insured for 50-80% of death benefit -viatical settlement provider becomes owner & beneficiary -beneficiary gets nothing at insured's death What does viatical settlement allow?

Typology: Exams

2024/2025

Available from 07/05/2025

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MN LIFE PRODUCER EXAM | QUESTIONS &
ANSWERS (VERIFIED) | LATEST UPDATE |
GRADED A+
Accelerated Benefits Rider
Correct Answer: -pays 50-80% of death benefit
-insured retains policy ownership & can designate beneficiary
-beneficiary gets remainder at insured's death
Viatical Settlement
Correct Answer: -viatical settlement provider buys policy from insured for 50-80% of death benefit
-viatical settlement provider becomes owner & beneficiary
-beneficiary gets nothing at insured's death
What does viatical settlement allow?
Correct Answer: it allows a chronically or terminally ill insured to gain a sum of money that is needed to
pay medical expenses or to enhance the quality of life
Frank intends to use his life insurance to make the down payment on a vacation home. In so doing, Frank
is using which of the following?
Correct Answer: the policy's cash value
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Download MN LIFE PRODUCER EXAM | QUESTIONS & ANSWERS (VERIFIED) | LATEST UPDATE | GRADED A+ and more Exams Insurance law in PDF only on Docsity!

MN LIFE PRODUCER EXAM | QUESTIONS &

ANSWERS (VERIFIED) | LATEST UPDATE |

GRADED A+

Accelerated Benefits Rider Correct Answer: - pays 50-80% of death benefit

  • insured retains policy ownership & can designate beneficiary
  • beneficiary gets remainder at insured's death Viatical Settlement Correct Answer: - viatical settlement provider buys policy from insured for 50-80% of death benefit
  • viatical settlement provider becomes owner & beneficiary
  • beneficiary gets nothing at insured's death What does viatical settlement allow? Correct Answer: it allows a chronically or terminally ill insured to gain a sum of money that is needed to pay medical expenses or to enhance the quality of life Frank intends to use his life insurance to make the down payment on a vacation home. In so doing, Frank is using which of the following? Correct Answer: the policy's cash value

Mary inherited $10 million several years ago. She has just bought a life insurance policy to help preserve her estate. All of the following statements regarding this are correct EXCEPT Correct Answer: to keep policy proceeds out of her estate, Mary should make sure she is the owner The amount of money a person might typically receive from a viatical settlement Correct Answer: 50 - 80% of the death benefit Which of the following best describes "life insurance death benefits avoid probate"? Correct Answer: the death benefit is paid to the beneficiary without to regard for what the insured's will may say Which of the following statements about tax treatment of funds received through a qualified viatical statement is correct? Correct Answer: the insured pays no federal income tax but may have to pay state income tax Life insurance policy proceeds are protected from the claims of creditors due to the policy's Correct Answer: Spendthrift clause Life insurance can provide both death benefits and living benefits. All of the following are death benefit- related reasons for owning life insurance EXCEPT Correct Answer: to supplement one's retirement income Human Life Value Approach

  • clothing
  • utilities
  • taxes
  • savings
  • medical expenses When looking at how much income his family would need if he were to die prematurely, Tom discovered that the Social Security survivors benefit would not give them enough ongoing income. If securing his family's financial future is his top priority, what is his best response? Correct Answer: Tom can buy additional life insurance to cover the amount needed to provide an adequate stream of income upon his death. Business Uses of Life Insurance Correct Answer: - bull sell agreement (cross purchase & entity purchase)
  • key person
  • deferred compensating
  • split-dollar
  • salary continuation
  • retire business debt Non-qualified plans Correct Answer: offers benefits to select employees, not to all
  • executive bonus plan
  • deferred compensation plan
  • salary continuation plan (SERP)
  • spilt-dollar plan (tradition/classic, reverse, & equity) Cross purchase Approach Correct Answer: - to fund buy/sell agreement
  • each owner purchases a life insurance on other owners Entity purchase approach Correct Answer: - business itself buys life insurance on each individual
  • to fund/sell
  • more owners - this approach What is the main difference between a traditional deferred compensation plan and a salary continuation plan?` Correct Answer: the covered employee does not defer compensation with a salary continuation plan When an employee retires, what is the general income tax treatment of the benefit payments he or she receives under a deferred compensation plan? Correct Answer: They are fully taxable All of the following statements regarding an insured executive bonus plan are correct EXCEPT Correct Answer: the employer is required to pay all of the premiums for the policy Which statement correctly describes a deferred compensation plan?