XCEL PRACTICE EXAM 1 QUESTIONS
AND ANSWERS
Which of the following statements about the classification of applicants is
INCORRECT? - ANSWER-Substandard applicants are never declined by
underwriters
Post-tax dollar contributions are found in: - ANSWER-Roth IRA investments
An existing life insurance policy is being replaced by a new one. A notice of
replacement must be provided by the to be signed by the applicant. - ANSWER-
producer
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: -
ANSWER-The premiums can be lowered or raised, based on investment
performance
Additional coverage can be added to a Whole Life policy by adding a(n): - ANSWER-
decreasing term rider
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect, EXCEPT: - ANSWER-
free look period has expired
a variable insurance policy - ANSWER-does not guarantee a return on its investment
accounts
In the event of an illness, a(n) -------- policy would reimburse an insured for loss of
earnings - ANSWER-disability income
What kind of insurance policy supplies an income stream over a set period of time
that starts when the insured dies? - ANSWER-family maintenance policy
Which of these factors do NOT play a role in the underwriting of a life insurance
policy? - ANSWER-marital status
Whose life is covered on a life insurance policy that contains a payor benefit clause?
- ANSWER-child
t is the policy owner of an irrevocable life insurance policy, if he wants to change it.
whos permission must he have - ANSWER-the beneficiary
a life insurance policy can be backdated before the application date for how long -
ANSWER-6 months
________ % of life insurance premiums is usually deductible for federal income tax
purposes - ANSWER-0
, Defamation occurs when an agent makes a false statement intended to - ANSWER-
malign another insurer
the amount of monthly disability benefits payable under social security is determined
by what - ANSWER-amount of benefits available from other sources
which is considered a limited pay life policy - ANSWER-life paid up at age 70
if an individual is covered under Accidental death policy and dies, an autopsy cant be
preformed if - ANSWER-the state prohibits by law
Which of these circumstances is a Business Disability Buy-Sell policy designed to
help in the sale of a business? - ANSWER-business owner becoming disabled
K is the insured and P is the sole beneficiary on a life insurance policy. Both are
involved in a fatal accident where K dies before P. Under the Common Disaster
provision, which of these statements is true? - ANSWER-proceeds will be paid to Ks
estate if P dies within a specified time
which statement regarding key employee life policy is NOT true - ANSWER-the
beneficiary is named by the employee
in a disability income policy, which clause acts as a deductible - ANSWER-
elimination period
Which of the following policies is characterized by a flexible premium and death
benefit and allows the policyowner control of the investment aspect of the plan? -
ANSWER-variable universal life
T sends proof of loss to her insurer for an acceptable medical expense claim under
her individual Health Insurance policy. Upon receipt, the insurer must pay the
benefits - ANSWER-immediately
what settlement option does not involve the systematic liquidation of the death
proceeds - ANSWER-interest only
What action will an insurer take if an interest payment on a policy loan is not made
on time? - ANSWER-automatically add the amount of interest due to the loan
balance
What type of life policy covers two people and pays upon the death of the last
insured? - ANSWER-survivorship
Which is true concerning a Variable Universal Life policy? - ANSWER-Policyowner
controls where the investment will go and selects the amount of the premium
payment
AND ANSWERS
Which of the following statements about the classification of applicants is
INCORRECT? - ANSWER-Substandard applicants are never declined by
underwriters
Post-tax dollar contributions are found in: - ANSWER-Roth IRA investments
An existing life insurance policy is being replaced by a new one. A notice of
replacement must be provided by the to be signed by the applicant. - ANSWER-
producer
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: -
ANSWER-The premiums can be lowered or raised, based on investment
performance
Additional coverage can be added to a Whole Life policy by adding a(n): - ANSWER-
decreasing term rider
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect, EXCEPT: - ANSWER-
free look period has expired
a variable insurance policy - ANSWER-does not guarantee a return on its investment
accounts
In the event of an illness, a(n) -------- policy would reimburse an insured for loss of
earnings - ANSWER-disability income
What kind of insurance policy supplies an income stream over a set period of time
that starts when the insured dies? - ANSWER-family maintenance policy
Which of these factors do NOT play a role in the underwriting of a life insurance
policy? - ANSWER-marital status
Whose life is covered on a life insurance policy that contains a payor benefit clause?
- ANSWER-child
t is the policy owner of an irrevocable life insurance policy, if he wants to change it.
whos permission must he have - ANSWER-the beneficiary
a life insurance policy can be backdated before the application date for how long -
ANSWER-6 months
________ % of life insurance premiums is usually deductible for federal income tax
purposes - ANSWER-0
, Defamation occurs when an agent makes a false statement intended to - ANSWER-
malign another insurer
the amount of monthly disability benefits payable under social security is determined
by what - ANSWER-amount of benefits available from other sources
which is considered a limited pay life policy - ANSWER-life paid up at age 70
if an individual is covered under Accidental death policy and dies, an autopsy cant be
preformed if - ANSWER-the state prohibits by law
Which of these circumstances is a Business Disability Buy-Sell policy designed to
help in the sale of a business? - ANSWER-business owner becoming disabled
K is the insured and P is the sole beneficiary on a life insurance policy. Both are
involved in a fatal accident where K dies before P. Under the Common Disaster
provision, which of these statements is true? - ANSWER-proceeds will be paid to Ks
estate if P dies within a specified time
which statement regarding key employee life policy is NOT true - ANSWER-the
beneficiary is named by the employee
in a disability income policy, which clause acts as a deductible - ANSWER-
elimination period
Which of the following policies is characterized by a flexible premium and death
benefit and allows the policyowner control of the investment aspect of the plan? -
ANSWER-variable universal life
T sends proof of loss to her insurer for an acceptable medical expense claim under
her individual Health Insurance policy. Upon receipt, the insurer must pay the
benefits - ANSWER-immediately
what settlement option does not involve the systematic liquidation of the death
proceeds - ANSWER-interest only
What action will an insurer take if an interest payment on a policy loan is not made
on time? - ANSWER-automatically add the amount of interest due to the loan
balance
What type of life policy covers two people and pays upon the death of the last
insured? - ANSWER-survivorship
Which is true concerning a Variable Universal Life policy? - ANSWER-Policyowner
controls where the investment will go and selects the amount of the premium
payment
