XCEL Virginia-LIFE & HEALTH EXAM SIMULATOR
Latest Update | Questions And Complete Answers | A+
Grade | Guaranteed Pass!!
A policy that becomes a Modified Endowment Contract (MEC): -
ANSWER ✓ will loose many of its tax advantages
What is the primary purpose of a rating service company such as
A.M Best? - ANSWER ✓ Determine financial strength of an
insurance company
What is considered to be the primary reason for buying life
insurance? - ANSWER ✓ Provide death benefits
Which of the following is NOT considered advertising? -
ANSWER ✓ A rating from a rating service company, such as
A.M. Best
A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called - ANSWER
✓ A self-funded plan
What kind of life insurance policy issued by a mutual insurer
provides a return of divisible surplus? - ANSWER ✓ Participating
life insurance policy
, Why are dividends from a mutual insurer not subject to taxation?
- ANSWER ✓ Because dividends are considered to be a return
of premium
A type of insurer that is owned by its policyowners is called -
ANSWER ✓ Mutual
A nonparticipating company is sometimes called a(n) - ANSWER
✓ stock insurer
The Fair Credit and Reporting Act's main purpose is to -
ANSWER ✓ protect consumers with guidelines regarding credit
reporting and distribution
The Do Not Call Registry offers exemptions for calls placed from
all of the following EXCEPT - ANSWER ✓ Insurance sales calls
An insurer's ability to make unpredictable payouts to
policyowners is called - ANSWER ✓ Liquidity
A nonparticipating policy will - ANSWER ✓ not pay dividends
Ken is a producer who has obtained Consumer Information
Reports under false pretenses. Under the Fair Credit Reporting
,Act, what is the maximum penalty that may be imposed on Ken? -
ANSWER ✓ $5,000
A life insurance company has transferred some of its risk to
another insurer. The insurer assuming the risk is called the -
ANSWER ✓ reinsurer
Karen is a producer who has obtained personal information about
a client without having a legitimate reason to do so. Under the
McCarran-Ferguson Act, what is the minimum penalty for this? -
ANSWER ✓ $10,000
Which of these are considered to be events or conditions that
increase the chances of an insured's loss? - ANSWER ✓
Hazards
People with higher loss exposure have the tendency to purchase
insurance more often than those at average risk. This is called -
ANSWER ✓ adverse selection
An example of risk sharing would be - ANSWER ✓ Doctors
pooling their money to cover malpractice exposures
Which of these techniques will remove the risk of losing money in
the stock market by never purchasing stocks? - ANSWER ✓
Risk Avoidance
, How do insurers predict the increase of individual risks? -
ANSWER ✓ The law of large numbers
Insurance companies determine risk exposure by which of the
following? - ANSWER ✓ Law of large numbers and risk pooling
Because an insurance contract has been prepared by an
insurance company with no negotiation, it is considered -
ANSWER ✓ A contract of adhesion
A producer's powers stated in the agency contract are: -
ANSWER ✓ Express
What makes an insurance policy a unilateral contract? -
ANSWER ✓ Only the insurer is legally bound
Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n) - ANSWER ✓
Concealment
Legal purpose is a term used in contract law meaning - ANSWER
✓ there must be legal reasons for entering into the contract
Latest Update | Questions And Complete Answers | A+
Grade | Guaranteed Pass!!
A policy that becomes a Modified Endowment Contract (MEC): -
ANSWER ✓ will loose many of its tax advantages
What is the primary purpose of a rating service company such as
A.M Best? - ANSWER ✓ Determine financial strength of an
insurance company
What is considered to be the primary reason for buying life
insurance? - ANSWER ✓ Provide death benefits
Which of the following is NOT considered advertising? -
ANSWER ✓ A rating from a rating service company, such as
A.M. Best
A plan in which an employer pays insurance benefits from a fund
derived from the employer's current revenues is called - ANSWER
✓ A self-funded plan
What kind of life insurance policy issued by a mutual insurer
provides a return of divisible surplus? - ANSWER ✓ Participating
life insurance policy
, Why are dividends from a mutual insurer not subject to taxation?
- ANSWER ✓ Because dividends are considered to be a return
of premium
A type of insurer that is owned by its policyowners is called -
ANSWER ✓ Mutual
A nonparticipating company is sometimes called a(n) - ANSWER
✓ stock insurer
The Fair Credit and Reporting Act's main purpose is to -
ANSWER ✓ protect consumers with guidelines regarding credit
reporting and distribution
The Do Not Call Registry offers exemptions for calls placed from
all of the following EXCEPT - ANSWER ✓ Insurance sales calls
An insurer's ability to make unpredictable payouts to
policyowners is called - ANSWER ✓ Liquidity
A nonparticipating policy will - ANSWER ✓ not pay dividends
Ken is a producer who has obtained Consumer Information
Reports under false pretenses. Under the Fair Credit Reporting
,Act, what is the maximum penalty that may be imposed on Ken? -
ANSWER ✓ $5,000
A life insurance company has transferred some of its risk to
another insurer. The insurer assuming the risk is called the -
ANSWER ✓ reinsurer
Karen is a producer who has obtained personal information about
a client without having a legitimate reason to do so. Under the
McCarran-Ferguson Act, what is the minimum penalty for this? -
ANSWER ✓ $10,000
Which of these are considered to be events or conditions that
increase the chances of an insured's loss? - ANSWER ✓
Hazards
People with higher loss exposure have the tendency to purchase
insurance more often than those at average risk. This is called -
ANSWER ✓ adverse selection
An example of risk sharing would be - ANSWER ✓ Doctors
pooling their money to cover malpractice exposures
Which of these techniques will remove the risk of losing money in
the stock market by never purchasing stocks? - ANSWER ✓
Risk Avoidance
, How do insurers predict the increase of individual risks? -
ANSWER ✓ The law of large numbers
Insurance companies determine risk exposure by which of the
following? - ANSWER ✓ Law of large numbers and risk pooling
Because an insurance contract has been prepared by an
insurance company with no negotiation, it is considered -
ANSWER ✓ A contract of adhesion
A producer's powers stated in the agency contract are: -
ANSWER ✓ Express
What makes an insurance policy a unilateral contract? -
ANSWER ✓ Only the insurer is legally bound
Intentional withholding of material facts that would affect an
insurance policy's validity is called a(n) - ANSWER ✓
Concealment
Legal purpose is a term used in contract law meaning - ANSWER
✓ there must be legal reasons for entering into the contract
