XCEL SOLUTIONS PENNSYLVANIA
INSURANCE TEST QUESTIONS WITH
CORRECT ANSWERS
If the insurance Department determines that the issuance of a temporary producer
license serves in the public's best interest, the license may be issued to - ANSWER-
an executor of a deceased producer's estate
A producer who offers 10% of his commission to a potential client as an inducement
to purchase an insurance policy is committing the act of - ANSWER-inducement
As a condition for a loan, a bank requires the borrower to purchase credit insurance
from a specific company. What is the bank guilty of? - ANSWER-Coercion
Proceeds of the viatical settlement contract could be subject to the claims of -
ANSWER-Creditors
For Pennsylvania Insurance Code violations, the Commissioner may assess a -
ANSWER-administrative penalty
One role of the Commissioner is to - ANSWER-enforce state insurance laws
A producer that willfully violates any provision of Pennsylvania Insurance law may be
imposed to a maximum penalty set by the Commissioner at - ANSWER-$5,000 per
violation
In Pennsylvania, who is responsible for Continuing Education (CE) course content
approval - ANSWER-Commissioner
What is required before an insurance producer can act as a representative of an
insurer - ANSWER-Producer needs to be appointed by that insurer
An insurer formed according to the legal requirements of another country is
considered - ANSWER-Alien insurer
A life insurance producer licensed in the Commonwealth of Pennsylvania is
authorized to - ANSWER-Solicit, receive and forward applications to the insurer
In order to solicit insurance in Pennsylvania, all of the following is required EXCEPT -
ANSWER-be at least 21 years of age
Any of the following may be an unfair claims practice EXCEPT - ANSWER-Refusing
to pay persons bringing false or fraudulent claims
A transaction in which a new life insurance policy is purchases and an existing life
insurance policy is surrendered is called - ANSWER-Replacement
,Which of the following provisions protects a Pennsylvania policy owner from an
innocent mistake made on the application over 2 years ago? - ANSWER-
Incontestability provision
When a licensee's address has changed, who must be notified of this change? -
ANSWER-Insurance Department
Which of the following is a violation of Pennsylvania insurance law? - ANSWER-
Offering insurance contracts through unlicensed entities
A producer is meeting with a client to determine whether an annuity would be
suitable for purchase. Which of the following topics needs to be discussed with the
client? - ANSWER-Financial objectives
On occasion, insurable interest may exist in the absence of economic interest. Which
of the following examples does this pertain to? - ANSWER-husband and wife
The free look period provided in a life insurance policy is usually - ANSWER-10 days
Which of the following is considered to be an event or condition that increases the
probability of an insured's loss? - ANSWER-Hazard
Which of the following BEST describes a conditional insurance contract? -
ANSWER-A contract that requires certain conditions or acts by the insured individual
if an insured dies during the grace period with no premiums paid - ANSWER-The
policy would be payable, minus the premium amount
Purchasing a life insurance policy in order to avoid the forced sale of assets upon
death is called? - ANSWER-estate conservation
Which of the following is an annuity that is linked to a market-related index? -
ANSWER-Equity-indexed annuity
Viatical settlement brokers send packets of information to potential viatees. These
information packets normally include existing policy terms and which of the
following? - ANSWER-Viator's medical prognosis
The conversion privilege under a group life plan allows an employee to convert to an
- ANSWER-individual plan upon employee termination
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value.
She would like to borrow $15,000 against the cash value. Which of the following
statements is TRUE? - ANSWER-Net death benefit will be reduced if the loan is not
repaid
What is involved when a life insurance policy has been backdated? - ANSWER-
Making the policy effective on an earlier date than the present
, Which type of annuity stops all payments upon the death of the annuitant? -
ANSWER-Life annuity
What happens to the coverage under a children's term rider when that child reaches
a certain specified age? - ANSWER-Coverage is eliminated
All of the following are exempt from the 10% tax penalty for early qualified plan
withdrawals EXCEPT - ANSWER-Stock purchase
Which of the following is NOT an Unfair Claim Settlement Practice? - ANSWER-
Providing claim payments to insureds according to the policy's coverage guidelines
All of the following riders can increase the death benefit amount EXCEPT -
ANSWER-Waiver of Premium
How are annuities given favorable tax treatment? - ANSWER-Gains are taxed at
distribution
In which of the following relationships would there NOT be an insurable interest? -
ANSWER-Business owner to business customer
Rob purchased a standard whole life policy with a $500,000 death benefit when he
was age 30. His insurance agent told him the policy would be paid up if he reached
age 100. The present cash value of the policy equals $250,000. Rob recently died
age 60. The death benefit would be - ANSWER-$500,000
An endorsement found in an insurance plan which modifies the provisions of the
policy is called a(n) - ANSWER-rider
When a producer offer something of value in return for the purchase of an insurance
policy, which prohibited sales practice has been committed? - ANSWER-Inducement
All of the following are examples of a Business Continuation Plan EXCEPT -
ANSWER-Deferred Compensation
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is
permitted if it occurs - ANSWER-from insurer to insurer and no cash is received by
the policy owner
Producers must complete a total of ___ Continuing Education credits for each two-
year licensing period - ANSWER-24
Which type of life insurance offers flexible premiums, a flexible death benefit, and the
choice of how the cash value will be invested? - ANSWER-Variable universal policy
An error was made on Mary's life insurance application. Which of the following areas
do errors commonly occur on applications and for which the incontestable clause
does not apply? - ANSWER-Age
INSURANCE TEST QUESTIONS WITH
CORRECT ANSWERS
If the insurance Department determines that the issuance of a temporary producer
license serves in the public's best interest, the license may be issued to - ANSWER-
an executor of a deceased producer's estate
A producer who offers 10% of his commission to a potential client as an inducement
to purchase an insurance policy is committing the act of - ANSWER-inducement
As a condition for a loan, a bank requires the borrower to purchase credit insurance
from a specific company. What is the bank guilty of? - ANSWER-Coercion
Proceeds of the viatical settlement contract could be subject to the claims of -
ANSWER-Creditors
For Pennsylvania Insurance Code violations, the Commissioner may assess a -
ANSWER-administrative penalty
One role of the Commissioner is to - ANSWER-enforce state insurance laws
A producer that willfully violates any provision of Pennsylvania Insurance law may be
imposed to a maximum penalty set by the Commissioner at - ANSWER-$5,000 per
violation
In Pennsylvania, who is responsible for Continuing Education (CE) course content
approval - ANSWER-Commissioner
What is required before an insurance producer can act as a representative of an
insurer - ANSWER-Producer needs to be appointed by that insurer
An insurer formed according to the legal requirements of another country is
considered - ANSWER-Alien insurer
A life insurance producer licensed in the Commonwealth of Pennsylvania is
authorized to - ANSWER-Solicit, receive and forward applications to the insurer
In order to solicit insurance in Pennsylvania, all of the following is required EXCEPT -
ANSWER-be at least 21 years of age
Any of the following may be an unfair claims practice EXCEPT - ANSWER-Refusing
to pay persons bringing false or fraudulent claims
A transaction in which a new life insurance policy is purchases and an existing life
insurance policy is surrendered is called - ANSWER-Replacement
,Which of the following provisions protects a Pennsylvania policy owner from an
innocent mistake made on the application over 2 years ago? - ANSWER-
Incontestability provision
When a licensee's address has changed, who must be notified of this change? -
ANSWER-Insurance Department
Which of the following is a violation of Pennsylvania insurance law? - ANSWER-
Offering insurance contracts through unlicensed entities
A producer is meeting with a client to determine whether an annuity would be
suitable for purchase. Which of the following topics needs to be discussed with the
client? - ANSWER-Financial objectives
On occasion, insurable interest may exist in the absence of economic interest. Which
of the following examples does this pertain to? - ANSWER-husband and wife
The free look period provided in a life insurance policy is usually - ANSWER-10 days
Which of the following is considered to be an event or condition that increases the
probability of an insured's loss? - ANSWER-Hazard
Which of the following BEST describes a conditional insurance contract? -
ANSWER-A contract that requires certain conditions or acts by the insured individual
if an insured dies during the grace period with no premiums paid - ANSWER-The
policy would be payable, minus the premium amount
Purchasing a life insurance policy in order to avoid the forced sale of assets upon
death is called? - ANSWER-estate conservation
Which of the following is an annuity that is linked to a market-related index? -
ANSWER-Equity-indexed annuity
Viatical settlement brokers send packets of information to potential viatees. These
information packets normally include existing policy terms and which of the
following? - ANSWER-Viator's medical prognosis
The conversion privilege under a group life plan allows an employee to convert to an
- ANSWER-individual plan upon employee termination
Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value.
She would like to borrow $15,000 against the cash value. Which of the following
statements is TRUE? - ANSWER-Net death benefit will be reduced if the loan is not
repaid
What is involved when a life insurance policy has been backdated? - ANSWER-
Making the policy effective on an earlier date than the present
, Which type of annuity stops all payments upon the death of the annuitant? -
ANSWER-Life annuity
What happens to the coverage under a children's term rider when that child reaches
a certain specified age? - ANSWER-Coverage is eliminated
All of the following are exempt from the 10% tax penalty for early qualified plan
withdrawals EXCEPT - ANSWER-Stock purchase
Which of the following is NOT an Unfair Claim Settlement Practice? - ANSWER-
Providing claim payments to insureds according to the policy's coverage guidelines
All of the following riders can increase the death benefit amount EXCEPT -
ANSWER-Waiver of Premium
How are annuities given favorable tax treatment? - ANSWER-Gains are taxed at
distribution
In which of the following relationships would there NOT be an insurable interest? -
ANSWER-Business owner to business customer
Rob purchased a standard whole life policy with a $500,000 death benefit when he
was age 30. His insurance agent told him the policy would be paid up if he reached
age 100. The present cash value of the policy equals $250,000. Rob recently died
age 60. The death benefit would be - ANSWER-$500,000
An endorsement found in an insurance plan which modifies the provisions of the
policy is called a(n) - ANSWER-rider
When a producer offer something of value in return for the purchase of an insurance
policy, which prohibited sales practice has been committed? - ANSWER-Inducement
All of the following are examples of a Business Continuation Plan EXCEPT -
ANSWER-Deferred Compensation
A tax-free Section 1035 Exchange of a life insurance policy to a different policy is
permitted if it occurs - ANSWER-from insurer to insurer and no cash is received by
the policy owner
Producers must complete a total of ___ Continuing Education credits for each two-
year licensing period - ANSWER-24
Which type of life insurance offers flexible premiums, a flexible death benefit, and the
choice of how the cash value will be invested? - ANSWER-Variable universal policy
An error was made on Mary's life insurance application. Which of the following areas
do errors commonly occur on applications and for which the incontestable clause
does not apply? - ANSWER-Age
