XCEL Chapter 4 QUESTIONS WITH CORRECT ANSWERS
John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them? CORRECT ANS Second-to-die policy
An insurance policy written after 1988 that fails to pass the seven-pay test is known as CORRECT ANS a modified endowment contract
What is the proper order of initial life insurance premiums, from lowest to highest? CORRECT ANS Modified premium, ordinary life, single premium
In a renewable term life insurance policy, the contract will usually CORRECT ANS require a higher premium payable at each renewal
Which of the following is NOT a true description of non-medical life insurance? CORRECT ANS Applicants are not required to answer medical questions on the application
A life insurance policy's limit of liability would be CORRECT ANS a policy's face amount
Which of the following is NOT true regarding a family policy that covers children? CORRECT ANS
Conversion of child's coverage to permanent insurance requires evidence of insurability
A life insurance policy where the insured can choose where the cash value can be invested is called CORRECT ANS variable life
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called CORRECT ANS endowment insurance
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2? CORRECT ANS 10%
John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them? CORRECT ANS Second-to-die policy
An insurance policy written after 1988 that fails to pass the seven-pay test is known as CORRECT ANS a modified endowment contract
What is the proper order of initial life insurance premiums, from lowest to highest? CORRECT ANS Modified premium, ordinary life, single premium
In a renewable term life insurance policy, the contract will usually CORRECT ANS require a higher premium payable at each renewal
Which of the following is NOT a true description of non-medical life insurance? CORRECT ANS Applicants are not required to answer medical questions on the application
A life insurance policy's limit of liability would be CORRECT ANS a policy's face amount
Which of the following is NOT true regarding a family policy that covers children? CORRECT ANS
Conversion of child's coverage to permanent insurance requires evidence of insurability
A life insurance policy where the insured can choose where the cash value can be invested is called CORRECT ANS variable life
A life insurance policy that pays the face amount if the insured survives to a specified period of time is called CORRECT ANS endowment insurance
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2? CORRECT ANS 10%
