XCEL Solutions Final Exam 2025 Practice Test
200 Questions and Correct Answers/ XCEL Life
Insurance Final 2025-2026 Practice Exam
A $20,000 life insurance application is completed, however the producer does not
collect the initial premium. At what point does the coverage go into effect -
ANSWER-When the applicant receives the policy and pays the initial premium
B owns a Whole Life policy with a guaranteed insurability option that allows him
to purchase, without evidence of insurability, stated amounts of - ANSWER-
additional Whole Life coverage at specified times
Which of these provisions is not required in life insurance policies - ANSWER-
Extended term
Which type of renewability best describes a disability income policy that covers an
individual until the age of 65, but the insurer has the right to change the premium
rate for the overall risk class? - ANSWER-Guaranteed renewable
K is the insured an P is the sole beneficiary on a life insurance policy. both are
involved in a fatal accident where K dies before P. Under the common disaster
provision, which of these statements is true - ANSWER-Proceeds will be payable
to K's estate if P dies within a specified time
M's insurance company denied a reinstatement application for her lapsed insurance
policy. The company did not notify M of this denial. How many days from the
reinstatement application date does the insurance company have to notify M of
denial before the policy will be automatically placed back in force - ANSWER-45
days
pg. 1
,Which of these is not considered to be an element of an insurance contract -
ANSWER-negotiating
K has a life insurance policy where her husband is beneficiary and her daughter is
contingent beneficiary. Under the Common Disaster clause, if K and her husband
are both killed in an automobile accident, where would the death proceeds be
directed? - ANSWER-The contingent - their daughter
Which of the following life insurance policies combine term insurance with an
investment element - ANSWER-universal life
Which type of contract liquidates an estate through recurrent payments -
ANSWER-Annuity
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years.
The annuity will then pay P retirement payments after the 15 years. Which type of
annuity did P purchase? - ANSWER-deferred
Term life policies that have the ability to be converted to permanent coverage may
do so during a specific time period. This conversion period - ANSWER-varies
according to the contract
Credit life insurance is - ANSWER-insurance issued on a debtor to cover
outstanding loan balances
M has an insurance policy that also has an outstanding policy loan at the time of
M's death. The insurer will deduct the outstanding loan balance from the -
ANSWER-Policy proceeds
pg. 2
, What action will an insurer take if an interest payment on a policy loan is not made
on time - ANSWER-automatically add the amount of interest due to the loan
balance
In Texas, an individual life insurance policy is REQUIRED to have a grace period
of - ANSWER-31 days
Which factors are taken into consideration when an insurance company determines
the premium rate for a whole life policy on an applicant - ANSWER-Risk
classification
Q purchases a $500,000 life insurance policy and pays a $900 in premiums over
the first 6 months. Q dies suddenly and the beneficiary is paid $500,000. This
exchange of unequal values reflects which of the following insurance contract
features - ANSWER-Aleatory
Which of these types of life insurance allows the policy owner to have level
premiums and to also choose from a selection of investment options - ANSWER-
Variable Life
R becomes disabled and owns an individual disability income policy. When is R
eligible to receive disability benefits - ANSWER-Upon satisfying the elimination
period requirement
Many small business owners worry her their business would survive financially if
the owner becomes disabled. The policy best addresses this concern is -
ANSWER-Business overhead expense
A life insurance arrangement which circumvents insurance interest statutes is
called - ANSWER-Investor-Originated Life Insurance
pg. 3
200 Questions and Correct Answers/ XCEL Life
Insurance Final 2025-2026 Practice Exam
A $20,000 life insurance application is completed, however the producer does not
collect the initial premium. At what point does the coverage go into effect -
ANSWER-When the applicant receives the policy and pays the initial premium
B owns a Whole Life policy with a guaranteed insurability option that allows him
to purchase, without evidence of insurability, stated amounts of - ANSWER-
additional Whole Life coverage at specified times
Which of these provisions is not required in life insurance policies - ANSWER-
Extended term
Which type of renewability best describes a disability income policy that covers an
individual until the age of 65, but the insurer has the right to change the premium
rate for the overall risk class? - ANSWER-Guaranteed renewable
K is the insured an P is the sole beneficiary on a life insurance policy. both are
involved in a fatal accident where K dies before P. Under the common disaster
provision, which of these statements is true - ANSWER-Proceeds will be payable
to K's estate if P dies within a specified time
M's insurance company denied a reinstatement application for her lapsed insurance
policy. The company did not notify M of this denial. How many days from the
reinstatement application date does the insurance company have to notify M of
denial before the policy will be automatically placed back in force - ANSWER-45
days
pg. 1
,Which of these is not considered to be an element of an insurance contract -
ANSWER-negotiating
K has a life insurance policy where her husband is beneficiary and her daughter is
contingent beneficiary. Under the Common Disaster clause, if K and her husband
are both killed in an automobile accident, where would the death proceeds be
directed? - ANSWER-The contingent - their daughter
Which of the following life insurance policies combine term insurance with an
investment element - ANSWER-universal life
Which type of contract liquidates an estate through recurrent payments -
ANSWER-Annuity
P, age 50, purchased an annuity that P will fund with $500/ month for 15 years.
The annuity will then pay P retirement payments after the 15 years. Which type of
annuity did P purchase? - ANSWER-deferred
Term life policies that have the ability to be converted to permanent coverage may
do so during a specific time period. This conversion period - ANSWER-varies
according to the contract
Credit life insurance is - ANSWER-insurance issued on a debtor to cover
outstanding loan balances
M has an insurance policy that also has an outstanding policy loan at the time of
M's death. The insurer will deduct the outstanding loan balance from the -
ANSWER-Policy proceeds
pg. 2
, What action will an insurer take if an interest payment on a policy loan is not made
on time - ANSWER-automatically add the amount of interest due to the loan
balance
In Texas, an individual life insurance policy is REQUIRED to have a grace period
of - ANSWER-31 days
Which factors are taken into consideration when an insurance company determines
the premium rate for a whole life policy on an applicant - ANSWER-Risk
classification
Q purchases a $500,000 life insurance policy and pays a $900 in premiums over
the first 6 months. Q dies suddenly and the beneficiary is paid $500,000. This
exchange of unequal values reflects which of the following insurance contract
features - ANSWER-Aleatory
Which of these types of life insurance allows the policy owner to have level
premiums and to also choose from a selection of investment options - ANSWER-
Variable Life
R becomes disabled and owns an individual disability income policy. When is R
eligible to receive disability benefits - ANSWER-Upon satisfying the elimination
period requirement
Many small business owners worry her their business would survive financially if
the owner becomes disabled. The policy best addresses this concern is -
ANSWER-Business overhead expense
A life insurance arrangement which circumvents insurance interest statutes is
called - ANSWER-Investor-Originated Life Insurance
pg. 3
