XCEL Life and Health Insurance | Questions and correct answers | Latest version 2024/2025

XCEL Life and Health Insurance | Questions and correct answers | Latest version 2024/2025 What is the primary purpose of a rating service company such as A.M Best? - ANSWER -Determine f inancial strength of an insurance company What is considered to be the primary reason for buying life insurance? - ANSWER -Provide death benefits Which of the following is NOT considered advertising? - ANSWER -A rating from a rating service company, such as A.M. Best A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - ANSWER -A self-funded plan What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus? - ANSWER -Participating life insurance policy Why are dividends from a mutual insurer not subject to taxation? - ANSWER -Because dividends are considered to be a return of premium A type of insurer that is owned by its policyowners is called - ANSWER -Mutual A nonparticipating company is sometimes called a(n) - ANSWER -stock insurer The Fair Credit and Reporting Act's main purpose is to - ANSWER -protect consumers with guidelines regarding credit reporting and distribution The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT - ANSWER -Insurance sales calls An insurer's ability to make unpredictable payouts to policyowners is called - ANSWER -Liquidity A nonparticipating policy will - ANSWER -not pay dividends Ken is a producer who has obtained Consumer Information Reports under false pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken? - ANSWER $5,000 A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the - ANSWER -reinsurer Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this? - ANSWER -$10,000 Which of these are considered to be events or conditions that increase the chances of an insured's loss? - ANSWER -Hazards People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. This is called - ANSWER -adverse selection An example of risk sharing would be - ANSWER -Doctors pooling their money to cover malpractice exposures Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? - ANSWER -Risk Avoidance How do insurers predict the increase of individual risks? - ANSWER -The law of large numbers Insurance companies determine risk exposure by which of the following? - ANSWER -Law of large numbers and risk pooling Because an insurance contract has been prepared by an insurance company with no negotiation, it is considered - ANSWER -A contract of adhesion A producer's powers stated in the agency contract are: - ANSWER -Express