Xcel Practice Chapter Exam Complete Solutions
A whole life insurance policyowner does not wish to continue making premium payments. Which of the
following allows the policyowner to sell the policy for more than its cash value?
✔️ Life-Settlement Contract.
P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if
he dies before age 70. What type of policy does P own?
✔️ Endowment at Age 70.
Which type of life policy includes a monthly mortality charge and offers self-directed investment
choices?
✔️ Variable Universal Life.
A policy of adhesion can only be modified by whom?
✔️ The Insurance company.
Which of the following consists of an offer, acceptance, and consideration?
✔️ Contract.
What type of annuity has a cash value based on the performance of its underlying investment funds?
✔️ Variable.
Which statement is CORRECT regarding the tax treatment of a lump-sum payment to a life insurance
policy's primary beneficiary?
✔️ All proceeds are income tax-free in the year they are received.
A life insurance application may be rejected based on all these factors EXCEPT:
✔️ Gender.
,Term Insurance has which of the following characteristics?
✔️ Expires at the end of the policy period.
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of
the following?
✔️ An Aviation Exclusion.
In a life insurance policy, which provision specifies who can select policy options, designate and name a
beneficiary, and be the policy owner?
✔️ Owner's Rights.
The entity whose sole purpose is to share medical data among its member companies is called the:
✔️ Medical Information Bureau (MIB).
M completes an application for life insurance but does not pay the initial premium. All of these actions
must occur before M's policy goes into effect EXCEPT:
✔️ The free-look period has expired.
The cash value in a(n) ________________ Life policy may fluctuate to reflect changing assumptions
regarding mortality costs, interest, and expense factors.
✔️ A Universal Life policy.
An employee with $25,000 group term life coverage was recently terminated. This employee's group
coverage may be converted to a:
✔️ $25,000 Individual Whole Life policy.
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit
amount?
✔️ Accidental Death and Dismemberment clause.
, Q is seriously injured in an automobile accident and becomes totally disabled. How many months must
Q be disabled to qualify for Social Security disability benefits?
✔️ 5 months.
Which statement regarding the Misstatement of Age provision is true?
✔️ Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered.
Which of the following is an important underwriting principle of group life insurance?
✔️ Everyone must be covered in the group.
An architecture firm would suffer a significant financial loss if its project manager died. Which type of
policy should the firm purchase for its project manager?
✔️ Key Person Life Policy.
S is covered by a whole life policy. Which insurance product can be used to cover his children?
✔️ Child Term Rider.
A 15-year mortgage is best protected by which type of life policy?
✔️ 15-year Decreasing Term.
E and F are business partners. Each has a $500,000 life insurance policy on the other, naming himself as
primary beneficiary. After terminating their business, E dies four months later. Although E was married
with three children at the time of death, the primary beneficiary remains F. However, an insurable
interest no longer exists. Where will the proceeds from E's life insurance policy be directed?
✔️ To F.
When a minor is designated as the sole primary beneficiary,
✔️ A guardian will be court-appointed in the event of a death claim.
A whole life insurance policyowner does not wish to continue making premium payments. Which of the
following allows the policyowner to sell the policy for more than its cash value?
✔️ Life-Settlement Contract.
P owns a $25,000 life policy that pays the face amount to him if he lives to age 70, or to his beneficiary if
he dies before age 70. What type of policy does P own?
✔️ Endowment at Age 70.
Which type of life policy includes a monthly mortality charge and offers self-directed investment
choices?
✔️ Variable Universal Life.
A policy of adhesion can only be modified by whom?
✔️ The Insurance company.
Which of the following consists of an offer, acceptance, and consideration?
✔️ Contract.
What type of annuity has a cash value based on the performance of its underlying investment funds?
✔️ Variable.
Which statement is CORRECT regarding the tax treatment of a lump-sum payment to a life insurance
policy's primary beneficiary?
✔️ All proceeds are income tax-free in the year they are received.
A life insurance application may be rejected based on all these factors EXCEPT:
✔️ Gender.
,Term Insurance has which of the following characteristics?
✔️ Expires at the end of the policy period.
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of
the following?
✔️ An Aviation Exclusion.
In a life insurance policy, which provision specifies who can select policy options, designate and name a
beneficiary, and be the policy owner?
✔️ Owner's Rights.
The entity whose sole purpose is to share medical data among its member companies is called the:
✔️ Medical Information Bureau (MIB).
M completes an application for life insurance but does not pay the initial premium. All of these actions
must occur before M's policy goes into effect EXCEPT:
✔️ The free-look period has expired.
The cash value in a(n) ________________ Life policy may fluctuate to reflect changing assumptions
regarding mortality costs, interest, and expense factors.
✔️ A Universal Life policy.
An employee with $25,000 group term life coverage was recently terminated. This employee's group
coverage may be converted to a:
✔️ $25,000 Individual Whole Life policy.
P is blinded in an industrial accident. Which provision of his life insurance policy will pay a stated benefit
amount?
✔️ Accidental Death and Dismemberment clause.
, Q is seriously injured in an automobile accident and becomes totally disabled. How many months must
Q be disabled to qualify for Social Security disability benefits?
✔️ 5 months.
Which statement regarding the Misstatement of Age provision is true?
✔️ Coverage will be adjusted to reflect the insured's true age if a misstatement of age is discovered.
Which of the following is an important underwriting principle of group life insurance?
✔️ Everyone must be covered in the group.
An architecture firm would suffer a significant financial loss if its project manager died. Which type of
policy should the firm purchase for its project manager?
✔️ Key Person Life Policy.
S is covered by a whole life policy. Which insurance product can be used to cover his children?
✔️ Child Term Rider.
A 15-year mortgage is best protected by which type of life policy?
✔️ 15-year Decreasing Term.
E and F are business partners. Each has a $500,000 life insurance policy on the other, naming himself as
primary beneficiary. After terminating their business, E dies four months later. Although E was married
with three children at the time of death, the primary beneficiary remains F. However, an insurable
interest no longer exists. Where will the proceeds from E's life insurance policy be directed?
✔️ To F.
When a minor is designated as the sole primary beneficiary,
✔️ A guardian will be court-appointed in the event of a death claim.
