1. Which statement about irrevocable life insurance beneficiaries is true?

	a.	Most owners of life insurance policies make their beneficiaries irrevocable.
	b.	Irrevocable beneficiaries must pay income tax on the death benefit received.
	c.	An irrevocable beneficiary becomes a sole owner of the policy.
	d.	A common reason for naming someone as an irrevocable beneficiary is to protect the flow of child support payments if a paying ex-spouse dies.
	e.	Both a and c.

2.

Which statement about a life insurance policy's accidental death benefit is true?

	a.	Another name for the benefit is the additional purchase option.
	b.	It's a standard policy provision, not a rider.
	c.	In general, if death results from an accident, death must occur within 90 days of the accident event for the beneficiary to receive the accidental death benefit.
	d.	Most financial planners recommend insureds include this feature when purchasing policies.
	e.	All of the above are true.

3.

A worker bought a permanent life insurance policy 50 months ago, paying a monthly premium of $100. Then he lost his job, needed all the money he could find, lapsed his policy, and received $8,000 of cash from the insurance company. For federal income tax purposes, is any part of the $8,000 taxable income?

	a.	No
	b.	Yes, all $8,000
	c.	Yes, $5,000
	d.	Yes, $3,000
	e.	Yes, $2,000

4.

Which statement about life insurance policy lapses or reinstatements is always true?

	a.	Most lapsed policies are reinstated eventually.
	b.	A policyowner cannot reinstate a lapsed policy unless the reinstatement rider was purchased when the policy was issued.
	c.	Insureds do not have to prove they are still insurable when reinstating a policy.
	d.	The majority of reinstatements occur within the first 2 months of a lapse.
	e.	To reinstate, a policyowner must repay the missed premium payments without interest.

5.

The financial health of about 60% of life insurance companies is rated at least ______ by A.M. Best.

	a.	A++
	b.	A+
	c.	A
	d.	A-
	e.	B-