XCEL Solutions Practice Exam Simulator Questions and Answers Rated A

XCEL Solutions Practice Exam Simulator Questions and Answers Rated A Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary? All proceeds are income tax free in the year they are received. A(n) _____ insurance company is one formed in a country other than the United States. Alien Term insurance has which of the following characteristics? Expires at the end of the policy period. Which Federal law allows an insurer to obtain an inspection report on a potential insured? Fair Credit Reporting Act N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? Claim will be denied. T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? $0 All of the following are consider to be typical characteristics describing the nature of an insurance contract, EXCEPT: Aleatory K is looking to purchase Renewable Term insurance. Which of these types of Term insurance may be renewable? Level A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? Waiver of Premium P is the insured on a participating life policy. Which statement is true if P's premiums are waived due to a disability? P will still receive declared dividends. A policy of adhesion can only be modified by whom? The insurance company An individual working part-time has an annual income of 25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? $2,500 How long does the coverage normally remain on a limited-pay life policy? Age 100 A foreign insurance company doing business in Indiana: Is a company that was formed under the laws of another state. All are true statements regarding the underwriting process, EXCEPT: AIDS and HIV virus exams can be conducted in a discriminatory fashion. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Life Income Which of the following types of policies pays a benefit if the insured goes blind? AD&D Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the Marital deduction The amount of monthly disability benefits payable under Social Security is affected by which of the following factors? Amount of the benefit available from other sources. An individual covered under a Group Life insurance policy is considered to be a(n): Certificate holder The Consideration cause in a life insurance contract contains what pertinent information? Amount of premium payments and when they are due. An insurance applicant MUST be informed of an investigation regarding his/her reputation and character according to the: Fair Credit Reporting Act A(n) _____ term life policy is normally used when covering an insured's mortgage balance. Decreasing Life insurance coverage will frequently contain an Accelerated Benefit rider attached to the policy. What would be considered a "qualifying event" under these riders? Medical condition resulting in a significantly-shortened lifespan. Which of the following types of Term Life policies most likely contains a Renewability feature? 10 years Convertible Term What does the Indiana Life and Health Insurance Guaranty Association provide? Claim payments of admitted, involved insurance companies Which of these is NOT considered to be a right given to a p[policyowner? Modify a provision in the insurance contract. A(n) ____ contained in a life insurance policy states that the policy will NOT cover certain risks. Exclusion Which provision is NOT a requirement in a group life policy? Accidental (no AD&D) S is close to retiring and would like to purchase a policy that will yield greater gains than bonds, but will still protect the principle will a minimum level or risk. Which product would S be advised to purchase? Equity Index insurance The Common Disaster clause provides that if both the insured and the sole named beneficiary were to die in a common accident, which of the following is true>Exam Simulator - Indiana Life Insurance Only State Exam Simulator? This clause provided the payment of proceeds to the insured's estate. Variable annuities may invest premiums in each of the following, EXCEPT: Insurer's corporate business account L takes out a life insurance policy and dies 10 years later. During the claim process, the insurer discovers that L had understated her age on the application. Under the Misstatement of Age provision, the insurer will Adjust the death benefit to a reduced amount In life insurance, the needs approach is used mostly to establish: How much life insurance a client should apply for. If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of? Insured What type of life insurance gives the greatest amount of coverage for a limited period of time? Term life T is given a receipt after completing a life insurance application and paying the initial premium. Under this situation, T;s coverage is Conditional, depending on the Insurer's underwriting guidelines. J is issued a Life Insurance policy with a death benefit of $100,000. She pays $600 per year in premium for the first 5 years. The premium then increases to $900 per year in the sixth year, and remain level thereafter. The policy's death benefit also remains at $100,00. What type of Life Insurance policy is this? Modified Premium Life What benefit does the Payor clause on a Juvenile Life policy provide? Premium are waived if the payor becomes disabled. At the very least, an admitted insurance company shall be examined every _____ years. 5 When an insurance application is taken by a producer, which of these statements is true? Any changes made on the application require the applicant's initials. The type of annuity that can be purchased with one monetary deposit is called a(n): Immediate annuity Group life insurance policies are generally written as: Annually renewable term E and F are business partners. Each takes out a $500,000 life insurance policy on the other, naming himself as primary beneficiary. E and F eventually terminate their business, and four months later E dies. Although E was married with three children at the time of death, the primary beneficiary is still F. However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? F A variable insurance policy: does not guarantee a return on its investment accounts T would like to be assured $10,000 is available in 10 years to replace a roof on his house. What kind of $10,000 policy should T purchase? Ten-Year Endowment K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Dividend Option should she close? Paid-Up Additional Insurance K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? $20,000 What does a certificate pf authority allow? An insurance company to conduct insurance business in Indiana. Quarterly premium payments increase the annual cost of insurance because Interest to the insurer is decreased while the administrative costs are increased. C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true? ABC is the policyowner, C is the insured, and ABC is the beneficiary. Taking receipt of premiums and holding them for the insurance company is an example of Fiduciary responsibility The free-look period for life insurance policies issues in Indiana is ____ days. 10 A hearing must be held before a producer's license can be suspended or revoked. Prior to the hearing, the Insurance Commissioner is required to: Give written notice to the producer. A policy loan is made possible by which of these life insurance policy features? Cash value provision When an employee is terminated, which statement about a group term life conversion is true? Policy proceeds will be paid if the employee dies during the conversion period. What is the purpose of a Policy Summary? It highlights the critical parts of the policy issued