XCEL SOLUTIONS: Georgia Life-Only
Pre-Licensing Questions with Correct
Answers
When a policy pays dividends to its policyholders, it is said to be
-profitable
-mutual
-nonparticipating
-participating - ANSWERS-Participating
A participating policy is one in which insurance policies pay out dividends to the
policyholders.
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefit of its members is known as:
-a fraternal benefit society
-a stock insurer
-a mutual insurer
-the Life and Health Insurance Guaranty Association - ANSWERS-a fraternal benefit
society
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefit of its members is known as a fraternal benefit society.
Which of these describe a participating insurance policy?
-Policyowners are entitled to receive dividends
-Policyowners pay assessments for company losses
-Stock companies allow their policyowners to share in company earnings
-Policyowners are not entitled to vote for members of the board of directors -
ANSWERS-Policyowners are entitled to receive dividends
A participating life policy is one in which the policyowner receives dividends deriving
from the company's divisible surplus.
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the:
-State Guaranty Association
-Fair Labor Standards Board
-Fair Credit Reporting Act
-National Association of Insurance Commissioners - ANSWERS-Fair Credit Reporting
Act
The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if
that individual is being investigated by an inspection company.
Dividends payable to a policyowner are
,-guaranteed
-declared by the State
-declared by the insurance company
-strictly regulated - ANSWERS-declared by the insurance company
Dividends payable to a policyowner are declared by the insurance company.
What type of reinsurance contract involves two companies automatically sharing their
risk exposure?
-Arbitrage
-Facultative
-Excess
-Treaty - ANSWERS-Treaty
Under treaty reinsurance, each party automatically accepts specific percentages of the
insurer's business.
What year was the McCarran-Ferguson Act enacted?
-1944
-1945
-1946
-1947 - ANSWERS-1945
The McCarran-Ferguson Act was enacted in 1945 and made it clear that continued
regulation of insurance by the states was in the public's best interest.
What is the name of the law that requires insurers to disclose information gathering
practices and where the information was obtained?
-State Guaranty Association
-Fair Labor Standards Board
-Fair Credit Reporting Act
-National Association of Insurance Companies - ANSWERS-Fair Credit Reporting Act
The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if
that individual is being investigated by an inspection company.
Which of these is considered a statement that is assured to be true in every respect?
-Estoppel
-Warranty
-Guarantee
-Representation - ANSWERS-Warranty
A warranty is a statement that is considered guaranteed to be true.
Which of these is NOT a type of agent authority?
-Express
-Implied
-Principal
-Apparent - ANSWERS-Principal
Agent authority is what an agent is authorized to do on behalf of his company. The three
types of agent authority include express, implied, and apparent authority.
, Insurance policies are offered on a "take it or leave it" basis, which make them:
-Conditional Contracts
-Aleatory Contracts
-Unilateral Contracts
-Contracts of Adhesion - ANSWERS-Contracts of Adhesion
Because insurance policies are offered on a "take it or leave it" basis, they are referred
to as Contracts of Adhesion.
Which of the following consists of an offer, acceptance, and consideration?
-Warranty
-Estoppel
-Contract
-Representation - ANSWERS-Contract
Offer, acceptance, and consideration are all elements of a contract.
What is the consideration given by the insurer in the Consideration clause of a life
policy?
-Promise to never cancel coverage
-Promise to pay death benefit to a named beneficiary
-Promise to not raise premiums
-Promise to accept an insured's assignment of benefits - ANSWERS-Promise to pay
death benefit to a named beneficiary
Consideration is given by the insurer by promising to pay a death benefit to a named
beneficiary.
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called:
-representations
-consideration
-warranties
-guarantees - ANSWERS-representations
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called representations.
Who makes the legally enforceable promises in a unilateral insurance policy?
-Beneficiary
-Insurance company
-Insured
-Applicant - ANSWERS-Insurance company
Under a unilateral insurance policy, the insurance company makes the legally
enforceable promises.
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements?
-Consideration
Pre-Licensing Questions with Correct
Answers
When a policy pays dividends to its policyholders, it is said to be
-profitable
-mutual
-nonparticipating
-participating - ANSWERS-Participating
A participating policy is one in which insurance policies pay out dividends to the
policyholders.
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefit of its members is known as:
-a fraternal benefit society
-a stock insurer
-a mutual insurer
-the Life and Health Insurance Guaranty Association - ANSWERS-a fraternal benefit
society
A nonprofit incorporated society that does not have capital stock and operates for the
sole benefit of its members is known as a fraternal benefit society.
Which of these describe a participating insurance policy?
-Policyowners are entitled to receive dividends
-Policyowners pay assessments for company losses
-Stock companies allow their policyowners to share in company earnings
-Policyowners are not entitled to vote for members of the board of directors -
ANSWERS-Policyowners are entitled to receive dividends
A participating life policy is one in which the policyowner receives dividends deriving
from the company's divisible surplus.
An insurance applicant MUST be informed of an investigation regarding his/her
reputation and character according to the:
-State Guaranty Association
-Fair Labor Standards Board
-Fair Credit Reporting Act
-National Association of Insurance Commissioners - ANSWERS-Fair Credit Reporting
Act
The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if
that individual is being investigated by an inspection company.
Dividends payable to a policyowner are
,-guaranteed
-declared by the State
-declared by the insurance company
-strictly regulated - ANSWERS-declared by the insurance company
Dividends payable to a policyowner are declared by the insurance company.
What type of reinsurance contract involves two companies automatically sharing their
risk exposure?
-Arbitrage
-Facultative
-Excess
-Treaty - ANSWERS-Treaty
Under treaty reinsurance, each party automatically accepts specific percentages of the
insurer's business.
What year was the McCarran-Ferguson Act enacted?
-1944
-1945
-1946
-1947 - ANSWERS-1945
The McCarran-Ferguson Act was enacted in 1945 and made it clear that continued
regulation of insurance by the states was in the public's best interest.
What is the name of the law that requires insurers to disclose information gathering
practices and where the information was obtained?
-State Guaranty Association
-Fair Labor Standards Board
-Fair Credit Reporting Act
-National Association of Insurance Companies - ANSWERS-Fair Credit Reporting Act
The Fair Credit Reporting Act is a Federal law requiring an individual to be informed if
that individual is being investigated by an inspection company.
Which of these is considered a statement that is assured to be true in every respect?
-Estoppel
-Warranty
-Guarantee
-Representation - ANSWERS-Warranty
A warranty is a statement that is considered guaranteed to be true.
Which of these is NOT a type of agent authority?
-Express
-Implied
-Principal
-Apparent - ANSWERS-Principal
Agent authority is what an agent is authorized to do on behalf of his company. The three
types of agent authority include express, implied, and apparent authority.
, Insurance policies are offered on a "take it or leave it" basis, which make them:
-Conditional Contracts
-Aleatory Contracts
-Unilateral Contracts
-Contracts of Adhesion - ANSWERS-Contracts of Adhesion
Because insurance policies are offered on a "take it or leave it" basis, they are referred
to as Contracts of Adhesion.
Which of the following consists of an offer, acceptance, and consideration?
-Warranty
-Estoppel
-Contract
-Representation - ANSWERS-Contract
Offer, acceptance, and consideration are all elements of a contract.
What is the consideration given by the insurer in the Consideration clause of a life
policy?
-Promise to never cancel coverage
-Promise to pay death benefit to a named beneficiary
-Promise to not raise premiums
-Promise to accept an insured's assignment of benefits - ANSWERS-Promise to pay
death benefit to a named beneficiary
Consideration is given by the insurer by promising to pay a death benefit to a named
beneficiary.
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called:
-representations
-consideration
-warranties
-guarantees - ANSWERS-representations
Statements made on an insurance application that are believed to be true to the best of
the applicant's knowledge are called representations.
Who makes the legally enforceable promises in a unilateral insurance policy?
-Beneficiary
-Insurance company
-Insured
-Applicant - ANSWERS-Insurance company
Under a unilateral insurance policy, the insurance company makes the legally
enforceable promises.
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of
the following contractual elements?
-Consideration
