TYPE OF INSURANCE POLICIES (XCEL
SOLUTIONS) PRACTICE EXAM
QUESTIONS AND ANSWERS
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as: - ANSWER-Variable Life
A(n) ________ life policy offers the owner investment in products such as money-
market fund, long-term bonds and equities - ANSWER-Variable
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? -
ANSWER-20-pay life
What type of insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
G purchased a Family Income policy at age 40. The policy has a 20-year rider
period. IF G were to die at age 50, how long would G's family receive an income? -
ANSWER-10 years
What type of life policy covers 2 people and pays upon the death of the last insured?
- ANSWER-Survivorship
A variable insurance policy: - ANSWER-does not guarantee a return on its
investment accounts
What type of life insurance are credit policies issued as? - ANSWER-Terms
A limited-Pay life policy has: - ANSWER-premium payments limited to a specified
number of years
Which of the following actions require a policy owner to provide proof of insurability
in an Adjustable Life Policy - ANSWER-Increase Face amount
D needs life insurance that provides coverage for only a limited amount of time while
also paying the lowest possible premium. What kind of policy is needed? -
ANSWER-Level Term
Term insurance has which of the following characteristics? - ANSWER-Expires at the
end of the policy period
What type of life policy has a death benefit that adjusts periodically and is written for
a specific period of time? - ANSWER-Decreasing term- a decreasing term policy has
a death benefit that adjusts periodically and is written for a specified period of time
, Which of these life products is NOT considered interest-sensitive - ANSWER-
Modified Whole Life
What type of insurance offers permanent life coverage with premiums that are
payable for life? - ANSWER-Whole Life
Variable Life products require a producer to - ANSWER-Hold a life insurance license
and a Securities License
Whole life insurance policies are contractually guaranteed to provide each of the
following, EXCEPT: - ANSWER-Partial withdrawal features beyond a surrender
charge period
Which of the following policies is characterized by a flexible premium and death
benefit and allows the policy owner control of the investment aspect of the plan? -
ANSWER-Variable Universal Life
What kind of life policy either pays the face value upon the death of the insured or
when the insured reaches age 100? - ANSWER-Whole Life
When a life insurance policy exceeds certain IRS table values, the result would
create which of the following? - ANSWER-Modified Endowment Contract (MEC)
K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to
age 65, or to her beneficiary if she dies before age 65. K purchased which of the
following types of policies? - ANSWER-Endowment at Age 65
Life Insurance that covers an Insured's whole life with level premiums paid over a
limited time is called: - ANSWER-Limited Pay Life
K is looking to purchase Renewable Term insurance. Which of these types of Term
insurance may be renewable? - ANSWER-Level
Credit Life Insurance Is: - ANSWER-issued in an amount not to exceed the amount
of the loan
Which of the following types of policies BEST identifies one in which the cash value
may fluctuate to reflect changing assumptions regarding mortality cost, interest, and
expense factors ? - ANSWER-Universal Life
Life Insurance Immediately creates an estate upon the death of an insured. Which of
the following policies is characterized by guaranteed minimum death benefit? -
ANSWER-Variable Life
Which of the following policies combines investment choices with a form of Term
Coverage? - ANSWER-Variable Universal Life
M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year
for the first 5 years. At the beginning of sixth year, the premium will increase to $800
per year but will remain level thereafter. The face amount will remain at $70,000
SOLUTIONS) PRACTICE EXAM
QUESTIONS AND ANSWERS
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as: - ANSWER-Variable Life
A(n) ________ life policy offers the owner investment in products such as money-
market fund, long-term bonds and equities - ANSWER-Variable
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? -
ANSWER-20-pay life
What type of insurance incorporates flexible premiums and an adjustable death
benefit? - ANSWER-Universal Life
G purchased a Family Income policy at age 40. The policy has a 20-year rider
period. IF G were to die at age 50, how long would G's family receive an income? -
ANSWER-10 years
What type of life policy covers 2 people and pays upon the death of the last insured?
- ANSWER-Survivorship
A variable insurance policy: - ANSWER-does not guarantee a return on its
investment accounts
What type of life insurance are credit policies issued as? - ANSWER-Terms
A limited-Pay life policy has: - ANSWER-premium payments limited to a specified
number of years
Which of the following actions require a policy owner to provide proof of insurability
in an Adjustable Life Policy - ANSWER-Increase Face amount
D needs life insurance that provides coverage for only a limited amount of time while
also paying the lowest possible premium. What kind of policy is needed? -
ANSWER-Level Term
Term insurance has which of the following characteristics? - ANSWER-Expires at the
end of the policy period
What type of life policy has a death benefit that adjusts periodically and is written for
a specific period of time? - ANSWER-Decreasing term- a decreasing term policy has
a death benefit that adjusts periodically and is written for a specified period of time
, Which of these life products is NOT considered interest-sensitive - ANSWER-
Modified Whole Life
What type of insurance offers permanent life coverage with premiums that are
payable for life? - ANSWER-Whole Life
Variable Life products require a producer to - ANSWER-Hold a life insurance license
and a Securities License
Whole life insurance policies are contractually guaranteed to provide each of the
following, EXCEPT: - ANSWER-Partial withdrawal features beyond a surrender
charge period
Which of the following policies is characterized by a flexible premium and death
benefit and allows the policy owner control of the investment aspect of the plan? -
ANSWER-Variable Universal Life
What kind of life policy either pays the face value upon the death of the insured or
when the insured reaches age 100? - ANSWER-Whole Life
When a life insurance policy exceeds certain IRS table values, the result would
create which of the following? - ANSWER-Modified Endowment Contract (MEC)
K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to
age 65, or to her beneficiary if she dies before age 65. K purchased which of the
following types of policies? - ANSWER-Endowment at Age 65
Life Insurance that covers an Insured's whole life with level premiums paid over a
limited time is called: - ANSWER-Limited Pay Life
K is looking to purchase Renewable Term insurance. Which of these types of Term
insurance may be renewable? - ANSWER-Level
Credit Life Insurance Is: - ANSWER-issued in an amount not to exceed the amount
of the loan
Which of the following types of policies BEST identifies one in which the cash value
may fluctuate to reflect changing assumptions regarding mortality cost, interest, and
expense factors ? - ANSWER-Universal Life
Life Insurance Immediately creates an estate upon the death of an insured. Which of
the following policies is characterized by guaranteed minimum death benefit? -
ANSWER-Variable Life
Which of the following policies combines investment choices with a form of Term
Coverage? - ANSWER-Variable Universal Life
M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year
for the first 5 years. At the beginning of sixth year, the premium will increase to $800
per year but will remain level thereafter. The face amount will remain at $70,000
