Financial Advisor Insurance Planning for Financial Advisors 3

Question 1

Which type of annuity guarantees a fixed interest rate during the accumulation phase, providing predictable, stable growth?

Accepted Answer

Fixed annuity

Answer

Variable annuity

Answer

Equity-indexed annuity

Answer

Immediate variable annuity

Question 2

What is the primary tax advantage of a non-qualified deferred annuity?

Accepted Answer

Earnings grow on a tax-deferred basis until withdrawn

Answer

Withdrawals are always tax-free

Answer

Contributions are tax-deductible

Answer

The entire death benefit is excluded from income tax

Question 3

A Section 1035 exchange permits a policyholder to:

Accepted Answer

Exchange one life insurance or annuity contract for another without triggering immediate income tax

Answer

Roll over a 401(k) into a life insurance policy tax-free

Answer

Transfer funds between Roth and traditional IRAs without penalty

Answer

Convert a group term policy to individual whole life without evidence of insurability

Question 4

In property insurance, a coinsurance clause penalizes the insured when:

Accepted Answer

The insured carries less coverage than the required percentage of the property's replacement value

Answer

The insured files fraudulent claims

Answer

The insurer fails to pay a claim within the statutory period

Answer

The insured has multiple policies on the same property

Question 5

An umbrella liability insurance policy is primarily designed to:

Accepted Answer

Provide additional liability coverage above the limits of underlying policies

Answer

Replace underlying homeowners and auto insurance policies

Answer

Cover business liability risks excluded from personal policies

Answer

Provide protection against losses from natural disasters

Question 6

When using the human life value (HLV) approach to determine a client's life insurance need, the primary factor considered is:

Accepted Answer

The present value of the client's projected future earnings

Answer

The total amount of the client's outstanding debts

Answer

The client's current investment portfolio value

Answer

The replacement cost of the client's personal property

Question 7

In a split-dollar life insurance arrangement, which party typically owns the policy and is entitled to the cash value?

Accepted Answer

The employer or plan sponsor

Answer

The employee or key person insured

Answer

A third-party trustee

Answer

The named beneficiary