XCEL practice exams, Questions with accurate answers. Graded A. 2022/2023

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XCEL practice exams, Questions with accurate answers. Graded A. 2022/2023 A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate i... n the early years of the policy. Which of these statements made by the producer would be correct? - ✔✔20-Pay Life accumulates cash value faster than Straight Life A variable insurance policy: - ✔✔does not guarantee a return on its investment accounts A Renewable Term Policy is renewable at the option of the: - ✔✔Insured Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? - ✔✔Variable Life Which of the following actions is NOT possible with a Universal Life policy? - ✔✔Premiums may be applied as a credit against income tax Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - ✔✔conversion What type of policy would offer a 40-year old the quickest accumulation of cash value? - ✔✔20-pay life A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? - ✔✔Universal Life J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - ✔✔20-pay Life All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for: - ✔✔Modified Whole Life All of these are characteristics of an Adjustable Life policy, EXCEPT: - ✔✔face amount can be adjusted using policy dividends What kind of special need would a policyowner require with an Adjustable Life insurance policy? - ✔✔flexible premiums K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - ✔✔$20,000 death benefit What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? - ✔✔Face amount plus the policy's cash value Variable Life products require a producer to - ✔✔hold a Life Insurance license and a Securities license What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? - ✔✔whole life Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? - ✔✔Whole life policy with other insured rider Which of the following types of policies pays a benefit if the insured goes blind? - ✔✔AD&D All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: - ✔✔The premiums can be lowered or raised, based on investment performance M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is - ✔✔Modified Premium Life Additional coverage can be added to a Whole Life policy by adding a(n): - ✔✔decreasing term rider M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the: - ✔✔policy proceeds Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? - ✔✔Entire Contract provision S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? - ✔✔$50,000 A policy loan is made possible by which of these life insurance policy features? - ✔✔Cash value provision What is the Suicide provision designed to do? - ✔✔safeguard the insurer from an applicant who is contemplating suicide In a Life insurance contract, an insurance company's promise to pay stated benefits is called the: - ✔✔Insuring clause The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and - ✔✔the initial premium D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? - ✔✔The full face amount N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? - ✔✔exclusion Which statement is TRUE in regards to a policy loan? - ✔✔Past-due interest on a policy loan is added to the total debt When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): - ✔✔exclusion S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT - ✔✔beneficiary's age Which life insurance rider typically appears on a Juvenile life insurance policy? - ✔✔payor benefit rider How are surrender charges deducted in a life policy with a rear-end loaded provision? - ✔✔Deducted when the policy is discontinued The Consideration clause in a life insurance contract contains what pertinent information? - ✔✔Amount of premium payments and when they are due In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? - ✔✔Owner's Rights Which rider provides coverage for a child under a parent's life insurance policy? - ✔✔Child term rider Whose life is covered on a life insurance policy that contains a payor benefit clause? - ✔✔child The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - ✔✔ M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - ✔✔Revocable A level premium indicates: - ✔✔the premium is fixed for the entire duration of the contract What percent of personal life insurance premiums is usually deductible for federal income tax purposes? - ✔✔0% What is the underlying concept regarding level premiums? - ✔✔The early years are charged more than what is needed C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? - ✔✔the cost When can a policyowner change a revocable beneficiary? - ✔✔anytime Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - ✔✔Life Income A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? - ✔✔irrevocable On a life insurance policy, who is qualified to change the beneficiary designation? - ✔✔Policyowner T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? - ✔✔Request of the change will be refused Which of the following best describes a contingent beneficiary? - ✔✔Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - ✔✔$0 Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? - ✔✔All proceeds are income tax free in the year they are received Quarterly premium payments increase the annual cost of insurance because - ✔✔interest to the insurer is decreased while the administrative costs are increased A policyowner is allowed to pay premiums more than once a year under which provision? - ✔✔Mode of Premium What is the purpose of a Policy Summary? - ✔✔It highlights the critical parts of the policy issued A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? - ✔✔Aviation exclusion A life insurance application must be signed by all of these, EXCEPT: - ✔✔beneficiary An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - ✔✔When the conditions of the receipt are met Which parts of a life insurance policy are guaranteed to be true? - ✔✔warranty Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - ✔✔Risk classification Which of the following statements is CORRECT about an agent who is taking an insurance application? - ✔✔The agent should have the applicant initial any changes made on the application Upon delivery of a rated life insurance [Show More]

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