Xcel Exam Questions and Answers
100% Pass
How are contributions made to a Roth IRA handled for tax purposes? - ✔✔Not tax
deductible
Simon has purchased a fixed immediate annuity. His payment amount will be
dependent upon principal, interest, and the contract's - ✔✔income period
An error was made on Mary's life insurance application. Which of the following areas
are errors commonly made on applications for which the incontestable clause does NOT
apply? - ✔✔Age
Which of these is NOT considered to be a nonforfeiture option in a whole life insurance
policy? - ✔✔Interest Only
People with higher loss exposure have the tendency to purchase insurance more often
than those at average risk. This called - ✔✔Adverse selection
What would be an expense factor in an insurance program? - ✔✔Mortality costs
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,Joe has a life insurance policy that has a face amount of $300,000. After a number of
years, the policy's cash value accumulates to $50,000 and the face amount becomes
$350,000. What kind of policy is this? - ✔✔Universal life policy
A producer does NOT have a fiduciary responsibility - ✔✔the Pennsylvania Guaranty
Association
Who assumes the investment risk in a fixed annuity insurance contract? - ✔✔The
insurer
What is the primary reason for buying an annuity? - ✔✔Provide future economic
security
A life insurance policy becomes incontestable after it has been in force for - ✔✔2 years
Within how many days must a traditional IRA be rolled over to another IRA in order to
avoid tax consequences? - ✔✔60
A provision that allows a policy owner to temporarily give up ownership rights to
secure a loan is called - ✔✔Collateral assignment
All of these are considered sources of information that can assist an underwriter in
determining whether or not to accept a risk EXCEPT - ✔✔National association of
insurance underwriters
A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - ✔✔self funded plan
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, A whole life insurance policy accumulates cash value that becomes - ✔✔the policy loan
value which the insured may borrow against
The automatic premium loan provision authorizes an insurer to withdraw from a
policy's cash value the amount of - ✔✔Past due premiums that have not been paid by
the end of the grace period
Pre-death distributions from a modified endowment contract (MEC) receive different
tax treatment than other life insurance policies because - ✔✔the MEC tends to be an
investment vehicle
All of these are considered a form of advertising EXCEPT - ✔✔an insurer's AM best
rating
A securities license is required for a life insurance producer to sell - ✔✔variable life
insurance
Which of these factors help determine an insured's life insurance premium? -
✔✔avocation (hobby)
Replacement regulation is designed to protect interests of - ✔✔Policyowners
What is known as the immediate specific event causing loss and giving rise to risk? -
✔✔Peril
Agreements made by terminally ill persons to sell their life insurance policies at a
discount in order to pay medical expenses are called - ✔✔Viatical settlements
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
100% Pass
How are contributions made to a Roth IRA handled for tax purposes? - ✔✔Not tax
deductible
Simon has purchased a fixed immediate annuity. His payment amount will be
dependent upon principal, interest, and the contract's - ✔✔income period
An error was made on Mary's life insurance application. Which of the following areas
are errors commonly made on applications for which the incontestable clause does NOT
apply? - ✔✔Age
Which of these is NOT considered to be a nonforfeiture option in a whole life insurance
policy? - ✔✔Interest Only
People with higher loss exposure have the tendency to purchase insurance more often
than those at average risk. This called - ✔✔Adverse selection
What would be an expense factor in an insurance program? - ✔✔Mortality costs
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
,Joe has a life insurance policy that has a face amount of $300,000. After a number of
years, the policy's cash value accumulates to $50,000 and the face amount becomes
$350,000. What kind of policy is this? - ✔✔Universal life policy
A producer does NOT have a fiduciary responsibility - ✔✔the Pennsylvania Guaranty
Association
Who assumes the investment risk in a fixed annuity insurance contract? - ✔✔The
insurer
What is the primary reason for buying an annuity? - ✔✔Provide future economic
security
A life insurance policy becomes incontestable after it has been in force for - ✔✔2 years
Within how many days must a traditional IRA be rolled over to another IRA in order to
avoid tax consequences? - ✔✔60
A provision that allows a policy owner to temporarily give up ownership rights to
secure a loan is called - ✔✔Collateral assignment
All of these are considered sources of information that can assist an underwriter in
determining whether or not to accept a risk EXCEPT - ✔✔National association of
insurance underwriters
A plan in which an employer pays insurance benefits from a fund derived from the
employer's current revenues is called - ✔✔self funded plan
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
, A whole life insurance policy accumulates cash value that becomes - ✔✔the policy loan
value which the insured may borrow against
The automatic premium loan provision authorizes an insurer to withdraw from a
policy's cash value the amount of - ✔✔Past due premiums that have not been paid by
the end of the grace period
Pre-death distributions from a modified endowment contract (MEC) receive different
tax treatment than other life insurance policies because - ✔✔the MEC tends to be an
investment vehicle
All of these are considered a form of advertising EXCEPT - ✔✔an insurer's AM best
rating
A securities license is required for a life insurance producer to sell - ✔✔variable life
insurance
Which of these factors help determine an insured's life insurance premium? -
✔✔avocation (hobby)
Replacement regulation is designed to protect interests of - ✔✔Policyowners
What is known as the immediate specific event causing loss and giving rise to risk? -
✔✔Peril
Agreements made by terminally ill persons to sell their life insurance policies at a
discount in order to pay medical expenses are called - ✔✔Viatical settlements
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 3
