XCEL Chapter 4 Exam Review (1)
Questions and Answers 100% Pass
Decreasing term policies - ✔✔EX. mortgages. Policy amount decreases as the
outstanding mortgage balance decreases each year
Term policies - ✔✔Renewable, convertible, or renewable AND convertible
Nonforfeiture values - ✔✔Cash value
The MEC tends to be an investment vehicle - ✔✔Pre-death distributions from a
modified endowment contract (MEC) receive different tax treatment than other life
insurance policies because
Pre-death distributions will become taxable - ✔✔Under a Modified Endowment
Contract, what are the likely tax consequences?
Universal life - ✔✔Type of life insurance combines a savings element along with a
flexible premium option
Survivorship life policy - ✔✔Pays on the death of the last person
Single premium cash value policy - ✔✔A policy that is paid up after only one payment
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Will no longer provide insurance protection - ✔✔Shawn, Mike, and Dave are brothers
who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike
dies first, the policy proceeds
Non-medical - ✔✔Which of the following is a life insurance policy that does NOT
require a physical exam?
A nonforfeiture option can be used to increase the death benefit - ✔✔All of these are
valid options for an Adjustable Life Policy EXCEPT
Pre-death distributions are typically taxable - ✔✔Which of these describes the result of
a modified endowment contract that failed to meet the seven-pay test?
Require a higher premium payable at each renewal - ✔✔In a renewable term life
insurance policy, the contract will usually
Whole life policy with premiums paid up after 20 years - ✔✔A whole life insurance
policy where the premiums are paid up after 20 years would be considered a limited
pay life insurance policy
Variable whole life - ✔✔Has cash values that vary according to the investment
performance of common stocks
Juvenile insurance - ✔✔A Payor Benefit rider waives the premium ONLY in connection
with juvenile insurance
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
Questions and Answers 100% Pass
Decreasing term policies - ✔✔EX. mortgages. Policy amount decreases as the
outstanding mortgage balance decreases each year
Term policies - ✔✔Renewable, convertible, or renewable AND convertible
Nonforfeiture values - ✔✔Cash value
The MEC tends to be an investment vehicle - ✔✔Pre-death distributions from a
modified endowment contract (MEC) receive different tax treatment than other life
insurance policies because
Pre-death distributions will become taxable - ✔✔Under a Modified Endowment
Contract, what are the likely tax consequences?
Universal life - ✔✔Type of life insurance combines a savings element along with a
flexible premium option
Survivorship life policy - ✔✔Pays on the death of the last person
Single premium cash value policy - ✔✔A policy that is paid up after only one payment
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 1
, Will no longer provide insurance protection - ✔✔Shawn, Mike, and Dave are brothers
who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike
dies first, the policy proceeds
Non-medical - ✔✔Which of the following is a life insurance policy that does NOT
require a physical exam?
A nonforfeiture option can be used to increase the death benefit - ✔✔All of these are
valid options for an Adjustable Life Policy EXCEPT
Pre-death distributions are typically taxable - ✔✔Which of these describes the result of
a modified endowment contract that failed to meet the seven-pay test?
Require a higher premium payable at each renewal - ✔✔In a renewable term life
insurance policy, the contract will usually
Whole life policy with premiums paid up after 20 years - ✔✔A whole life insurance
policy where the premiums are paid up after 20 years would be considered a limited
pay life insurance policy
Variable whole life - ✔✔Has cash values that vary according to the investment
performance of common stocks
Juvenile insurance - ✔✔A Payor Benefit rider waives the premium ONLY in connection
with juvenile insurance
EMILY CHARLENE © 2025, ALL RIGHTS RESERVED 2
