XCEL Life Insurance Only Exam questions with correct answers

What type of insurance company sells insurance for a profit? CORRECT ANS Commercial Insurers (Private Insurance Companies) What type of insurance company sells more than one line of insurance? CORRECT ANS Multi-line insurer What type of companies are organized and incorporated under state laws for the purpose of making a profit for its stockholders? (shareholders) CORRECT ANS Stock Companies What type of companies are owned by their policyholders? CORRECT ANS Mutual Companies (Mutual insurers, Participating Insurers) a sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profits (or reserves). CORRECT ANS Dividend Why are dividends from a mutual insurer not subject to taxation? CORRECT ANS Because this type of dividend is considered to be a return of premium.