Hawaii retirement and other insurance concepts practice questions
Last updated
Section IV of the Hawaii Life exam's general part, Retirement and Other Insurance Concepts, has 8 of the 50 scoreable general questions. [1] The outline lists third-party ownership, life settlements, group life insurance (conversion privilege; contributory vs. noncontributory), retirement plans (qualified and nonqualified), life insurance needs analysis and suitability (personal needs; business needs such as key person and buy sell), Social Security benefits, and tax treatment of insurance premiums, proceeds and dividends (individual life, group life, modified endowment contracts). [1]
Group life conversion in Hawaii is covered on our Hawaii life law questions page. This page covers ownership and assignment, spouses' rights, group life protections, life settlements and the federal retirement figures, with 10 practice questions.
Ownership, assignment and dividends
- Assignment (HRS 431:10-228): a policy may be assignable or not, as its terms provide. Subject to the policy, a policy whose beneficiary may be changed at the insured's sole request may be assigned by pledge or transfer of title signed by the insured alone and delivered to the insurer. [2]
- Dividends (HRS 431:10-229): an insurer must pay dividends, unused premium refunds or savings on a participating policy only to the real party in interest shown in its records, or to someone to whom the right was assigned in writing of record with the insurer, among the listed persons. [3]
- Spouses (HRS 431:10-234): a life policy payable to the insured's spouse or reciprocal beneficiary is for that person's separate use and benefit, unless the policy says otherwise. A married person may take out and hold a policy on the life or health of a spouse, reciprocal beneficiary or children without the spouse's consent. [4]
Group life protections
A group life policy and its proceeds payable to the insured or beneficiary cannot be taken by legal or equitable process to pay a liability of anyone with a right under the policy. [5] The Insurance Division notes that group policies may cost less, and that coverage generally ends or the death benefit drops to 50% at age 65. [6]
Life settlements and taxes
The Insurance Division says a person who sells a policy in a life settlement may cancel within 60 days of the contract or 30 days after payment, whichever is earlier. It also says death benefits are usually exempt from federal income tax but may be subject to estate taxes. [6]
Retirement plan limits for 2026 (IRS)
The IRS set the 2026 employee deferral limit for 401(k), 403(b) and 457 plans at $24,500 and the IRA contribution limit at $7,500. The catch-up limit is $8,000 for workers 50 and over in those workplace plans and $1,100 for IRAs. [7]
Practice questions
1. Under Hawaii law, who decides whether a policy can be assigned?
A. The beneficiary
B. The commissioner
C. The policy's own terms
D. The producer
Answer: C. A policy may be assignable or not assignable, as provided by its terms. (HRS 431:10-228(a)) [2]
2. If the insured may change the beneficiary alone, who signs an assignment of the policy?
Answer: The insured alone, subject to the policy terms, with the assignment delivered to the insurer. (431:10-228(b)) [2]
3. To whom does a Hawaii insurer pay dividends on a participating policy?
Answer: The real party in interest shown in its records, or a person to whom the right was assigned in writing of record, among the persons listed. (HRS 431:10-229) [3]
4. A married person wants a policy on a spouse's life. Is the spouse's consent required under HRS 431:10-234?
Answer: No. A married person may take out and hold a policy on a spouse's life without the spouse's consent. [4]
5. A creditor of a deceased group life beneficiary tries to seize the group proceeds. What is the rule?
Answer: Group life proceeds payable to the insured or beneficiary cannot be applied by legal or equitable process to pay a liability of anyone with a right under the policy. (HRS 431:10-233) [5]
6. According to the Insurance Division, what often happens to group life coverage at age 65?
Answer: It generally ends or the death benefit is reduced to 50%. [6]
7. A policyowner signs a life settlement contract and is paid two weeks later. When does the cancellation right end?
Answer: The earlier of 60 days from the contract or 30 days after payment, so 30 days after payment here. [6]
8. Are life insurance death benefits subject to federal income tax, according to the Insurance Division?
Answer: Usually not, though they may be subject to estate taxes. [6]
9. What is the 2026 IRA contribution limit for a 45 year old?
Answer: $7,500. [7]
10. What is the 2026 catch-up limit for a 55 year old in a 401(k)?
Answer: $8,000, on top of the $24,500 deferral limit. [7]
Study tips for section IV
- Ownership questions: who can assign (per the policy terms), who gets dividends (the real party in interest).
- Group life: protected from creditors; often reduced at 65.
- Life settlements: cancel within 60 days of the contract or 30 days after payment, whichever is earlier.
Practice more with the free Hawaii life practice test.
Prep Retention is independent and is not affiliated with Pearson VUE or the state.
Sources
Laws and exam documents quoted as of October 2026.
- Pearson VUE, Hawaii content outlines 121201 (effective January 1, 2026): https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/121201.pdf
- HRS 431:10-228: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010-0228.htm
- HRS 431:10-229: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010-0229.htm
- HRS 431:10-234: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010-0234.htm
- HRS 431:10-233: https://data.capitol.hawaii.gov/hrscurrent/Vol09_Ch0431-0435H/HRS0431/HRS_0431-0010-0233.htm
- Hawaii Insurance Division, Life Insurance: https://cca.hawaii.gov/ins/life-insurance/
- IRS, 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (IR-2025-111): https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500