XCEL USES OF LIFE INSURANCE UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS COMPLETE STUDY GUIDE
●● A life insurance policy that has premiums fully paid up within a
stated time period is called
Answer: limited payment insurance
●● A Modified Endowment Contract (MEC) is best described as
Answer: A life insurance contract which accumulates cash values higher
than the IRS will allow
●● Shawn, Mike, and Dave are brothers who have a $100,000 "first to
die" joint life policy covering all three of their lives. If Mike dies first,
the policy proceeds
Answer: will no longer provide insurance protection
●● Julie has a $100,000 30-year mortgage on her new home. What type
of life insurance could she purchase that is designed to pay off the loan
balance if she dies within the 30-year period?
Answer: Decreasing term insurance
, ●● What is the automatic continuance of insurance coverage referred to
as?
Answer: renewal
●● All of these statements concerning whole life insurance are false
EXCEPT
Answer: When a whole life policy is surrendered, income taxes may be
owed
●● Variable life insurance and Universal life insurance are very similar.
Which of these features are held exclusively by variable universal life
insurance?
Answer: Policyowner has the right to select the investment which will
provide the greatest return
●● A securities license is required for a life insurance producer to sell
Answer: variable life insurance
●● Which policy feature makes a universal life policy different from a
whole life policy?
Answer: A flexible premium schedule
●● The least expensive option to pay off a 30-year mortgage balance
would be
ACTUAL QUESTIONS AND CORRECT
ANSWERS COMPLETE STUDY GUIDE
●● A life insurance policy that has premiums fully paid up within a
stated time period is called
Answer: limited payment insurance
●● A Modified Endowment Contract (MEC) is best described as
Answer: A life insurance contract which accumulates cash values higher
than the IRS will allow
●● Shawn, Mike, and Dave are brothers who have a $100,000 "first to
die" joint life policy covering all three of their lives. If Mike dies first,
the policy proceeds
Answer: will no longer provide insurance protection
●● Julie has a $100,000 30-year mortgage on her new home. What type
of life insurance could she purchase that is designed to pay off the loan
balance if she dies within the 30-year period?
Answer: Decreasing term insurance
, ●● What is the automatic continuance of insurance coverage referred to
as?
Answer: renewal
●● All of these statements concerning whole life insurance are false
EXCEPT
Answer: When a whole life policy is surrendered, income taxes may be
owed
●● Variable life insurance and Universal life insurance are very similar.
Which of these features are held exclusively by variable universal life
insurance?
Answer: Policyowner has the right to select the investment which will
provide the greatest return
●● A securities license is required for a life insurance producer to sell
Answer: variable life insurance
●● Which policy feature makes a universal life policy different from a
whole life policy?
Answer: A flexible premium schedule
●● The least expensive option to pay off a 30-year mortgage balance
would be
