XCEL TEST PAPER UPDATED QUESTIONS AND ANSWERS
GRADED A+
✔✔In a life insurance policy, the entire contract consists of the - ✔✔policy and attached
application;The entire contract of a life policy consists of the policy and attached
application.
✔✔What time period allows an insured's life insurance policy to remain in force even if
the premium was not paid on the due date? - ✔✔The grace period allows an insured's
life insurance policy to remain in force even if the premium was not paid on the due
date.
✔✔Which of these is NOT a valid policy dividend option? - ✔✔Monthly income
payments is not a valid policy dividend option.
✔✔What does the grace period allow a life insurance policyowner to do? - ✔✔Make a
premium payment after the due date without any loss of coverage
✔✔What does the guaranteed insurability option allow an insured to do? - ✔✔The
guaranteed insurability option allows an insured to purchase additional coverage with no
evidence of insurability required.
✔✔Which provision will pay a portion of the death benefit prior to the insured's death
due to a serious illness? - ✔✔he accelerated death benefit provision will pay a portion of
the death benefit prior to the insured's death due to a serious illness.
✔✔Jerry is an insured who understated his age on his life insurance application, paying
$12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted
death benefit be calculated? - ✔✔In this situation, the adjusted death benefit will be
calculated at 12/15th of the policy's face amount.
✔✔After a policy has lapsed, which provision allows the insured to continue coverage? -
✔✔The reinstatement provision allows an insured to continue coverage under a
previously lapsed policy.
✔✔If an insured dies because of an accident, which type of life insurance rider will
provide additional coverage? - ✔✔An accidental death rider provides additional
coverage in the event of accidental death.
✔✔Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - ✔✔the beneficiary should select the interest
option.
,✔✔A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - ✔✔The insured's estate; Creditors have rights to life
insurance policy proceeds when the beneficiary is the insured's estate.
✔✔How are death benefits that are received by a beneficiary normally treated for tax
purposes? - ✔✔Exempt from federal income taxes; Death benefits that are received by
a beneficiary are generally exempt from federal income tax.
✔✔Which of the following is NOT a life insurance settlement option? - ✔✔Extended
term option; All of these are life insurance settlement options EXCEPT "extended term
option
✔✔When calculating life insurance premium rates, which component would an agent's
commission fall under? - ✔✔The agent's commission is considered part of the insurer's
expenses and is a component of the premium.
✔✔Premiums are best described as - ✔✔money paid by the insured to acquire a
policy's benefits
✔✔When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - ✔✔Mortality is the component of a life insurance premium
that age and gender affects.
✔✔Which of the following is NOT a component of determining policy premiums? -
✔✔Dividends are not a component when determining policy premiums.
✔✔Which of the following describes the number of deaths in a year compared to the
number of people in a select group? - ✔✔Mortality rate; The number of deaths during a
year compared with the total number of persons exposed in the class is known as the
mortality rate.
✔✔The probability of death, listed by year, are demonstrated in - ✔✔Mortality tables
give a measure of the number of deaths in a given population over a certain period of
time.
✔✔The MIB (Medical Information Bureau) does NOT help to - ✔✔alert applicants of
medical problems; The MIB is a nonprofit trade organization which maintains medical
information about individuals. Information from the MIB is used by life and health
insurers. This helps insurance companies from adverse selection by applicants.
✔✔Which of the following statements BEST defines a material fact? - ✔✔A fact that
may affect an applicant being accepted or rejected could be classified as a material fact.
, ✔✔When an insurance company requests an attending physician's report, the request
must be accompanied by a - ✔✔An insurer's request for an attending physician's report
must be accompanied by a copy of the signed authorization.
✔✔What are members of the Medical Information Bureau (MIB) required to report? -
✔✔Medical ailments discovered during the underwriting process; Members of the
Medical Information Bureau are required to report medical impairments found during the
underwriting process.
✔✔Most U.S. life insurance companies belong to the - ✔✔Nearly every life insurer in
the United States belongs to the Medical Information Bureau.
✔✔How does a conditional receipt differ from a binding receipt? - ✔✔Binding receipts
always provide insurance which starts from the date of receipt; Only a binding receipt
always provides insurance that is effective from the date the receipt is given.
✔✔Which of the following life insurance classifications charges the highest premium? -
✔✔Substandard; A substandard classification charges the highest premium.
✔✔The Medical Information Bureau consists of - ✔✔Life and health insurers are
members of the Medical Information Bureau.
✔✔Which of the following types of information is NOT required for a life insurance
application? - ✔✔Ethnicity is not required information needed for a life insurance policy.
✔✔When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called - ✔✔underwriting; When an applicant
applies for insurance, the process by which the insurer determines whether to issue a
policy is called underwriting.
✔✔Which of the following statements pertaining to a life insurance policy application is
CORRECT? - ✔✔The names of both the insured and the beneficiary are indicated on
the application; The names of both the insured and the beneficiary are listed in Part I on
the application, along with the insured's age, address, birthdate, sex, income, marital
status, and occupation.
✔✔Which of the following is a source of underwriting information that specifically
focuses on an applicant's medical history? - ✔✔The Medical Information Bureau (MIB)
is a nonprofit central information agency that was established years ago by several
insurance companies to aid in the underwriting process. Its purpose is to serve as a
reliable source of medical information concerning applicants and to help disclose cases
where an applicant either forgets or conceals pertinent underwriting information, or
submits erroneous or misleading medical information with fraudulent intentions.
GRADED A+
✔✔In a life insurance policy, the entire contract consists of the - ✔✔policy and attached
application;The entire contract of a life policy consists of the policy and attached
application.
✔✔What time period allows an insured's life insurance policy to remain in force even if
the premium was not paid on the due date? - ✔✔The grace period allows an insured's
life insurance policy to remain in force even if the premium was not paid on the due
date.
✔✔Which of these is NOT a valid policy dividend option? - ✔✔Monthly income
payments is not a valid policy dividend option.
✔✔What does the grace period allow a life insurance policyowner to do? - ✔✔Make a
premium payment after the due date without any loss of coverage
✔✔What does the guaranteed insurability option allow an insured to do? - ✔✔The
guaranteed insurability option allows an insured to purchase additional coverage with no
evidence of insurability required.
✔✔Which provision will pay a portion of the death benefit prior to the insured's death
due to a serious illness? - ✔✔he accelerated death benefit provision will pay a portion of
the death benefit prior to the insured's death due to a serious illness.
✔✔Jerry is an insured who understated his age on his life insurance application, paying
$12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted
death benefit be calculated? - ✔✔In this situation, the adjusted death benefit will be
calculated at 12/15th of the policy's face amount.
✔✔After a policy has lapsed, which provision allows the insured to continue coverage? -
✔✔The reinstatement provision allows an insured to continue coverage under a
previously lapsed policy.
✔✔If an insured dies because of an accident, which type of life insurance rider will
provide additional coverage? - ✔✔An accidental death rider provides additional
coverage in the event of accidental death.
✔✔Pam is the primary beneficiary of a life insurance policy and wants to let the death
benefit accumulate and receive only the monthly investment proceeds. Which
settlement option should she choose? - ✔✔the beneficiary should select the interest
option.
,✔✔A creditor would be allowed rights to life insurance policy proceeds if which of the
following beneficiaries is chosen? - ✔✔The insured's estate; Creditors have rights to life
insurance policy proceeds when the beneficiary is the insured's estate.
✔✔How are death benefits that are received by a beneficiary normally treated for tax
purposes? - ✔✔Exempt from federal income taxes; Death benefits that are received by
a beneficiary are generally exempt from federal income tax.
✔✔Which of the following is NOT a life insurance settlement option? - ✔✔Extended
term option; All of these are life insurance settlement options EXCEPT "extended term
option
✔✔When calculating life insurance premium rates, which component would an agent's
commission fall under? - ✔✔The agent's commission is considered part of the insurer's
expenses and is a component of the premium.
✔✔Premiums are best described as - ✔✔money paid by the insured to acquire a
policy's benefits
✔✔When calculating life insurance premium rates, which component is affected by an
insured's age and gender? - ✔✔Mortality is the component of a life insurance premium
that age and gender affects.
✔✔Which of the following is NOT a component of determining policy premiums? -
✔✔Dividends are not a component when determining policy premiums.
✔✔Which of the following describes the number of deaths in a year compared to the
number of people in a select group? - ✔✔Mortality rate; The number of deaths during a
year compared with the total number of persons exposed in the class is known as the
mortality rate.
✔✔The probability of death, listed by year, are demonstrated in - ✔✔Mortality tables
give a measure of the number of deaths in a given population over a certain period of
time.
✔✔The MIB (Medical Information Bureau) does NOT help to - ✔✔alert applicants of
medical problems; The MIB is a nonprofit trade organization which maintains medical
information about individuals. Information from the MIB is used by life and health
insurers. This helps insurance companies from adverse selection by applicants.
✔✔Which of the following statements BEST defines a material fact? - ✔✔A fact that
may affect an applicant being accepted or rejected could be classified as a material fact.
, ✔✔When an insurance company requests an attending physician's report, the request
must be accompanied by a - ✔✔An insurer's request for an attending physician's report
must be accompanied by a copy of the signed authorization.
✔✔What are members of the Medical Information Bureau (MIB) required to report? -
✔✔Medical ailments discovered during the underwriting process; Members of the
Medical Information Bureau are required to report medical impairments found during the
underwriting process.
✔✔Most U.S. life insurance companies belong to the - ✔✔Nearly every life insurer in
the United States belongs to the Medical Information Bureau.
✔✔How does a conditional receipt differ from a binding receipt? - ✔✔Binding receipts
always provide insurance which starts from the date of receipt; Only a binding receipt
always provides insurance that is effective from the date the receipt is given.
✔✔Which of the following life insurance classifications charges the highest premium? -
✔✔Substandard; A substandard classification charges the highest premium.
✔✔The Medical Information Bureau consists of - ✔✔Life and health insurers are
members of the Medical Information Bureau.
✔✔Which of the following types of information is NOT required for a life insurance
application? - ✔✔Ethnicity is not required information needed for a life insurance policy.
✔✔When an applicant applies for insurance, the process by which the insurer
determines whether to issue a policy is called - ✔✔underwriting; When an applicant
applies for insurance, the process by which the insurer determines whether to issue a
policy is called underwriting.
✔✔Which of the following statements pertaining to a life insurance policy application is
CORRECT? - ✔✔The names of both the insured and the beneficiary are indicated on
the application; The names of both the insured and the beneficiary are listed in Part I on
the application, along with the insured's age, address, birthdate, sex, income, marital
status, and occupation.
✔✔Which of the following is a source of underwriting information that specifically
focuses on an applicant's medical history? - ✔✔The Medical Information Bureau (MIB)
is a nonprofit central information agency that was established years ago by several
insurance companies to aid in the underwriting process. Its purpose is to serve as a
reliable source of medical information concerning applicants and to help disclose cases
where an applicant either forgets or conceals pertinent underwriting information, or
submits erroneous or misleading medical information with fraudulent intentions.
