INSURANCE LICENSE PRACTICE
XCEL SOLUTIONS EXAM #3 LIFE
PROVISIONS QUESTIONS AND
ANSWERS
Which of these of policies may Not have the automatic premium loans provision
attached to it - ANSWER-Decreasing term
Which of these accounts is taken when a policy owner uses a life insurance policy as
collateral for a bank loan? - ANSWER-Collateral assignment
When does a Guaranteed insurability rider allow the insured to buy additional
coverage? - ANSWER-At a future date specified in the contract with no evidence of
insurability required
A policy loan is made possible by which of these life insurance policy features? -
ANSWER-Cash value provision
Which of these are NOT an example of a Nonforfeiture option? - ANSWER-Life
income
S would like to use dividends from her life insurance policy to purchase paid-up
additions. all of these would be factors that determine how much coverage can be
purchased EXCEPT - ANSWER-Beneficiary's age
S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100 S
dies 5 years later in 2008 and the insurer pays the beneficiary $10,500 what kind of
rider did S include on the policy? - ANSWER-Return of premium rider
S buys a $50,000 whole life policy with a $50,000 accidental death and
dismemberment rider. S dies 1 year later of natural causes. How much would the
insurer pays the beneficiary? - ANSWER-$50,000
How are policyowner dividends treated in regards to income tax? - ANSWER-
Interest on accumulation is taxed
All of the following statements are true regarding a policy's Grace period. EXCEPT? -
ANSWER-Past due premium are waived
D is policy owner and insured for a $50,000 life insurance policy the beneficiary is
D's wife Dean his wife divorce and Dean remarries transferring ownership of his
policy to his new wife. If Dean dies without making any further changes to him will
the policy proceeds be paid to? - ANSWER-Ex-wife
XCEL SOLUTIONS EXAM #3 LIFE
PROVISIONS QUESTIONS AND
ANSWERS
Which of these of policies may Not have the automatic premium loans provision
attached to it - ANSWER-Decreasing term
Which of these accounts is taken when a policy owner uses a life insurance policy as
collateral for a bank loan? - ANSWER-Collateral assignment
When does a Guaranteed insurability rider allow the insured to buy additional
coverage? - ANSWER-At a future date specified in the contract with no evidence of
insurability required
A policy loan is made possible by which of these life insurance policy features? -
ANSWER-Cash value provision
Which of these are NOT an example of a Nonforfeiture option? - ANSWER-Life
income
S would like to use dividends from her life insurance policy to purchase paid-up
additions. all of these would be factors that determine how much coverage can be
purchased EXCEPT - ANSWER-Beneficiary's age
S buys a $10,000 whole life policy in 2003 and pays an annual premium of $100 S
dies 5 years later in 2008 and the insurer pays the beneficiary $10,500 what kind of
rider did S include on the policy? - ANSWER-Return of premium rider
S buys a $50,000 whole life policy with a $50,000 accidental death and
dismemberment rider. S dies 1 year later of natural causes. How much would the
insurer pays the beneficiary? - ANSWER-$50,000
How are policyowner dividends treated in regards to income tax? - ANSWER-
Interest on accumulation is taxed
All of the following statements are true regarding a policy's Grace period. EXCEPT? -
ANSWER-Past due premium are waived
D is policy owner and insured for a $50,000 life insurance policy the beneficiary is
D's wife Dean his wife divorce and Dean remarries transferring ownership of his
policy to his new wife. If Dean dies without making any further changes to him will
the policy proceeds be paid to? - ANSWER-Ex-wife
