XCEL SOLUTIONS GEORGIA LIFE-
ONLY PRE-LICENSING EXAM
QUESTIONS WITH VERIFIED
ANSWERS
Which statement is TRUE regarding a Variable Whole Life policy?
-A minimum guaranteed Death benefit is provided
-It is a combination of an Endowment and an Increasing Term policy
-Its premiums and benefits are variable
-It has guaranteed dividends - ANSWER--A minimum guaranteed Death benefit is
provided
A Variable Whole Life policy provides a minimum guaranteed death benefit.
T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase?
-Interest-Sensitive Whole Life
-Ten-Year Endowment
-Variable Universal Life
-Ten-Year Renewable Term - ANSWER--Ten-Year Endowment
In this situation, a Ten-Year Endowment should be purchased to ensure the funds
will be available when needed.
The investment gains from a Universal Life Policy usually go toward:
-the death benefit
-the dividends
-the cash value
-paying off a policy loan - ANSWER--the cash value
In Universal Life Policy, income is usually directed toward the cash value.
A Universal Life policy is sometimes referred to as an unbundled Life Policy because
the owner can see the interest earned, cost of insurance, and the
-inherent risk
-commission rate
-inflation factor
-expense charges - ANSWER--expense charges
The Universal Life Policy is called an unbundled Life Policy because the policyholder
can see the expense charges, the interest earned, and the cost of insurance.
What type of life insurance are credit policies issued as?
-Whole
-Variable
-Term
-Universal - ANSWER--Term
The type of insurance used is decreasing term, with the term matched to the length
of the loan period (though usually limited to 10 years or less) and the decreasing
insurance amount matched to the declining loan balances.
,The __________ is authorized to assign a Life Insurance Policy as collateral for a
loan.
-beneficiary
-insured
-policyowner
-lender - ANSWER--policyowner
A life insurance policy may ONLY be assigned as collateral by the policyowner.
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay?
-The total premiums paid minus any policy loans
-Nothing
-$50,000
-$100,000 - ANSWER--$50,000
The suicide occurred outside the Suicide Clause period (normally 1-2 years), thus
the face amount will be paid.
An insurer may normally delay the payment of a cash value loan or surrender value
for up to
-2 months
-4 months
-6 months
-8 months - ANSWER--6 months
An insurer may delay the payment of a cash value loan or surrender value for up to 6
months.
A life insurance policyowner would like to take out a policy loan against the cash
value in his Whole Life policy. The interest rate applied to this loan may vary over
time. This is referred to as a(n) ____________ rate loan.
-Fluctuating
-Fixed
-Variable
-Increasing - ANSWER--Variable
The interest rate on a Variable rate cash value loan may vary over time.
Which of these is NOT considered to be a right given to a policyowner?
-Surrendering the policy's cash value
-Modify a provision in the insurance contract
-Assignment of ownership
-Change the beneficiary, if revocable - ANSWER--Modify a provision in the
insurance contract
Changing contract provisions is not a policyowner right.
All of these Settlement options involve the systematic liquidation of the death
proceeds in the event of the insured's death, EXCEPT:
-Fixed Period
-Interest Only
-Fixed Amount
, -Life Income - ANSWER--Interest Only
The Interest Only option does NOT involve the systematic liquidation of the death
proceeds.
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?
-Nonforfeiture
-Entire Contract
-Insuring Clause
-Owner's Rights - ANSWER--Owner's Rights
"Owner's Rights" states who may select policy options, designate and name a
beneficiary, and be the recipient of any financial benefits from the policy.
Which of the following statements about accumulated interest earned on dividends
from an insurance policy is TRUE?
-Partially taxable
-Tax deductible
-Nontaxable
-Taxed as ordinary income - ANSWER--Taxed as ordinary income
Accumulated interest earned on dividends from an insurance policy is taxed as
ordinary income.
Stranger Originated Life Insurance (STOLI) has been found to be in violation of
which of the following contractual elements?
-Consideration
-Competent Parties
-Offer/Acceptance
-Legal Purpose (Insurable Interest) - ANSWER--Legal Purpose (Insurable Interest)
A STOLI arrangement is used to circumvent state insurable interest statutes.
The Consideration Clause of an insurance contract includes:
-the buyer's guide
-a summary of the coverage provided
-the named beneficiaries
-the schedule and amount of premium payments - ANSWER--the schedule and
amount of premium payments
The Consideration clause of a Life or Health policy includes the schedule and
amount of premium payments.
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of?
-Insurer
-Beneficiary
-Reinsurer
-Insured - ANSWER--Insured
In a contract of adhesion, any confusing language would be interpreted in the favor
of the insured.
ONLY PRE-LICENSING EXAM
QUESTIONS WITH VERIFIED
ANSWERS
Which statement is TRUE regarding a Variable Whole Life policy?
-A minimum guaranteed Death benefit is provided
-It is a combination of an Endowment and an Increasing Term policy
-Its premiums and benefits are variable
-It has guaranteed dividends - ANSWER--A minimum guaranteed Death benefit is
provided
A Variable Whole Life policy provides a minimum guaranteed death benefit.
T would like to be assured $10,000 is available in 10 years to replace a roof on his
house. What kind of $10,000 policy should T purchase?
-Interest-Sensitive Whole Life
-Ten-Year Endowment
-Variable Universal Life
-Ten-Year Renewable Term - ANSWER--Ten-Year Endowment
In this situation, a Ten-Year Endowment should be purchased to ensure the funds
will be available when needed.
The investment gains from a Universal Life Policy usually go toward:
-the death benefit
-the dividends
-the cash value
-paying off a policy loan - ANSWER--the cash value
In Universal Life Policy, income is usually directed toward the cash value.
A Universal Life policy is sometimes referred to as an unbundled Life Policy because
the owner can see the interest earned, cost of insurance, and the
-inherent risk
-commission rate
-inflation factor
-expense charges - ANSWER--expense charges
The Universal Life Policy is called an unbundled Life Policy because the policyholder
can see the expense charges, the interest earned, and the cost of insurance.
What type of life insurance are credit policies issued as?
-Whole
-Variable
-Term
-Universal - ANSWER--Term
The type of insurance used is decreasing term, with the term matched to the length
of the loan period (though usually limited to 10 years or less) and the decreasing
insurance amount matched to the declining loan balances.
,The __________ is authorized to assign a Life Insurance Policy as collateral for a
loan.
-beneficiary
-insured
-policyowner
-lender - ANSWER--policyowner
A life insurance policy may ONLY be assigned as collateral by the policyowner.
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay?
-The total premiums paid minus any policy loans
-Nothing
-$50,000
-$100,000 - ANSWER--$50,000
The suicide occurred outside the Suicide Clause period (normally 1-2 years), thus
the face amount will be paid.
An insurer may normally delay the payment of a cash value loan or surrender value
for up to
-2 months
-4 months
-6 months
-8 months - ANSWER--6 months
An insurer may delay the payment of a cash value loan or surrender value for up to 6
months.
A life insurance policyowner would like to take out a policy loan against the cash
value in his Whole Life policy. The interest rate applied to this loan may vary over
time. This is referred to as a(n) ____________ rate loan.
-Fluctuating
-Fixed
-Variable
-Increasing - ANSWER--Variable
The interest rate on a Variable rate cash value loan may vary over time.
Which of these is NOT considered to be a right given to a policyowner?
-Surrendering the policy's cash value
-Modify a provision in the insurance contract
-Assignment of ownership
-Change the beneficiary, if revocable - ANSWER--Modify a provision in the
insurance contract
Changing contract provisions is not a policyowner right.
All of these Settlement options involve the systematic liquidation of the death
proceeds in the event of the insured's death, EXCEPT:
-Fixed Period
-Interest Only
-Fixed Amount
, -Life Income - ANSWER--Interest Only
The Interest Only option does NOT involve the systematic liquidation of the death
proceeds.
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?
-Nonforfeiture
-Entire Contract
-Insuring Clause
-Owner's Rights - ANSWER--Owner's Rights
"Owner's Rights" states who may select policy options, designate and name a
beneficiary, and be the recipient of any financial benefits from the policy.
Which of the following statements about accumulated interest earned on dividends
from an insurance policy is TRUE?
-Partially taxable
-Tax deductible
-Nontaxable
-Taxed as ordinary income - ANSWER--Taxed as ordinary income
Accumulated interest earned on dividends from an insurance policy is taxed as
ordinary income.
Stranger Originated Life Insurance (STOLI) has been found to be in violation of
which of the following contractual elements?
-Consideration
-Competent Parties
-Offer/Acceptance
-Legal Purpose (Insurable Interest) - ANSWER--Legal Purpose (Insurable Interest)
A STOLI arrangement is used to circumvent state insurable interest statutes.
The Consideration Clause of an insurance contract includes:
-the buyer's guide
-a summary of the coverage provided
-the named beneficiaries
-the schedule and amount of premium payments - ANSWER--the schedule and
amount of premium payments
The Consideration clause of a Life or Health policy includes the schedule and
amount of premium payments.
If a contract of adhesion contains complicated language, to whom would the
interpretation be in favor of?
-Insurer
-Beneficiary
-Reinsurer
-Insured - ANSWER--Insured
In a contract of adhesion, any confusing language would be interpreted in the favor
of the insured.
