XCEL SOLUTIONS IN LIFE INSURANCE
FINAL EXAM QUESTIONS AND
ANSWERS
What year was the McCarran - Ferguson Act enacted ? - ANSWER-1945
The Life and Health Insurance Guaranty Association is : - ANSWER-funded by
admitted insurance companies through assessments
Taking receipt of premiums and holding them for the insurance company is an
example of : - ANSWER-Fiduciary responsibility
Indiana's 10 - day free - look period for life insurance policies begins on the : -
ANSWER-date of delivery
An individual who purchases a Life annuity is given protection against : - ANSWER-
the risk of living longer than expected
What benefit does the Payor clause on a Juvenile Life policy provide ? - ANSWER-
Premiums are waived if payor becomes disabled
A policy of adhesion can only be modified by whom ? - ANSWER-The insurance
company
A producer inducing an insured to lapse , forfeit , or surrender insurance through
misrepresentation is committing the illegal act of : - ANSWER-twisting
Select the appropriate The part of a life insurance policy guaranteed to be true is
called a ( n ) : - ANSWER-warranty
Variable Life products require a producer to - ANSWER-hold a Life Insurance license
and a Securities license
T is an employee covered under a Group Life policy . If T's employment is terminated
, the conversion privilege gives T the right to convert : - ANSWER-to an individual
policy upon employment termination
A 55 year old recently received a $ 30,000 distribution from a previous employer's
401k plan , minus $ 6,000 withholding . Which federal taxes apply if none of the
funds were rolled over ? - ANSWER-Income taxes plus a 10 % penalty tax on $
30,000
What does a certificate of authority allow ? - ANSWER-An insurance company to
conduct insurance business in Indiana
How many days is a temporary producer's license valid ? - ANSWER-180
, During a life insurance sales transaction , which of the following forms must be
completed by a producer if the customer has existing life insurance coverage that is
being replaced ? - ANSWER-Notice Regarding Replacement of Life Insurance or
Annuity
An example of rebating would be : - ANSWER-returning a portion of a premium as
inducement to purchase insurance
Life insurance replacement regulation protects the interests of - ANSWER-the
policyowner
When a policy pays dividends to its policyholders , it is said to be - ANSWER-
participating
When a misrepresentation on a life insurance policy application is discovered , what
action may an insurance company take ? - ANSWER-Void the policy only if it is
discovered during the Contestable period and proven to be material
How do life insurance companies handle cases where the insured commits suicide
within the contract's stated Contestable period ? - ANSWER-Claims are denied
under the Suicide clause of the policy
What is Indiana's definition of Life insurance replacement ? - ANSWER-A transaction
in which a new policy is bought and an old policy is terminated
Which tax would an IRA participant be subjected to on distributions received prior to
age 59 1/2 ? - ANSWER-Ordinary income tax and a 10 % tax penalty for early
withdrawal
An employee with $ 25,000 group term life coverage was recently fired . This
employee's group coverage may be converted to a : - ANSWER-$ 25,000 individual
whole life policy
According to Indiana law , group life insurance conversion privileges must NOT : -
ANSWER-require evidence of insurability .
In life insurance , the needs approach is used mostly to establish : - ANSWER-how
much life insurance a client should apply for
The option that provides an additional death benefit for a limited amount of time at
the lowest possible cost is called a ( n ) : - ANSWER-Accidental Death and
Dismemberment rider ( AD & D )
Who makes the legally enforceable promises in a unilateral insurance policy ? -
ANSWER-Insurance company
A newly licensed producer must complete 24 hours of continuing education every
___ years . - ANSWER-2
FINAL EXAM QUESTIONS AND
ANSWERS
What year was the McCarran - Ferguson Act enacted ? - ANSWER-1945
The Life and Health Insurance Guaranty Association is : - ANSWER-funded by
admitted insurance companies through assessments
Taking receipt of premiums and holding them for the insurance company is an
example of : - ANSWER-Fiduciary responsibility
Indiana's 10 - day free - look period for life insurance policies begins on the : -
ANSWER-date of delivery
An individual who purchases a Life annuity is given protection against : - ANSWER-
the risk of living longer than expected
What benefit does the Payor clause on a Juvenile Life policy provide ? - ANSWER-
Premiums are waived if payor becomes disabled
A policy of adhesion can only be modified by whom ? - ANSWER-The insurance
company
A producer inducing an insured to lapse , forfeit , or surrender insurance through
misrepresentation is committing the illegal act of : - ANSWER-twisting
Select the appropriate The part of a life insurance policy guaranteed to be true is
called a ( n ) : - ANSWER-warranty
Variable Life products require a producer to - ANSWER-hold a Life Insurance license
and a Securities license
T is an employee covered under a Group Life policy . If T's employment is terminated
, the conversion privilege gives T the right to convert : - ANSWER-to an individual
policy upon employment termination
A 55 year old recently received a $ 30,000 distribution from a previous employer's
401k plan , minus $ 6,000 withholding . Which federal taxes apply if none of the
funds were rolled over ? - ANSWER-Income taxes plus a 10 % penalty tax on $
30,000
What does a certificate of authority allow ? - ANSWER-An insurance company to
conduct insurance business in Indiana
How many days is a temporary producer's license valid ? - ANSWER-180
, During a life insurance sales transaction , which of the following forms must be
completed by a producer if the customer has existing life insurance coverage that is
being replaced ? - ANSWER-Notice Regarding Replacement of Life Insurance or
Annuity
An example of rebating would be : - ANSWER-returning a portion of a premium as
inducement to purchase insurance
Life insurance replacement regulation protects the interests of - ANSWER-the
policyowner
When a policy pays dividends to its policyholders , it is said to be - ANSWER-
participating
When a misrepresentation on a life insurance policy application is discovered , what
action may an insurance company take ? - ANSWER-Void the policy only if it is
discovered during the Contestable period and proven to be material
How do life insurance companies handle cases where the insured commits suicide
within the contract's stated Contestable period ? - ANSWER-Claims are denied
under the Suicide clause of the policy
What is Indiana's definition of Life insurance replacement ? - ANSWER-A transaction
in which a new policy is bought and an old policy is terminated
Which tax would an IRA participant be subjected to on distributions received prior to
age 59 1/2 ? - ANSWER-Ordinary income tax and a 10 % tax penalty for early
withdrawal
An employee with $ 25,000 group term life coverage was recently fired . This
employee's group coverage may be converted to a : - ANSWER-$ 25,000 individual
whole life policy
According to Indiana law , group life insurance conversion privileges must NOT : -
ANSWER-require evidence of insurability .
In life insurance , the needs approach is used mostly to establish : - ANSWER-how
much life insurance a client should apply for
The option that provides an additional death benefit for a limited amount of time at
the lowest possible cost is called a ( n ) : - ANSWER-Accidental Death and
Dismemberment rider ( AD & D )
Who makes the legally enforceable promises in a unilateral insurance policy ? -
ANSWER-Insurance company
A newly licensed producer must complete 24 hours of continuing education every
___ years . - ANSWER-2
