XCEL TESTING SOLUTIONS LIFE AND
HEALTH EXAM REVIEW 2026 QUESTIONS
AND ANSWERS STUDY GUIDE
⩥ Alien Insurer. Answer: An Alien Insurer in the U.S. is an insurer
whose principal office and domiciled location is outside of the country.
⩥ Broker. Answer: Represents themselves and the insured (i.e., the client
or customer)
⩥ Captive Insurer. Answer: An issuer established and owned by a parent
firm for the purpose of insuring the parent firm's loss exposure.
⩥ Certificate of Authority. Answer: A license issued to an insurer by a
department of insurance3 (or equivalent state agency), which authorizes
that company to conduct insurance business in that particular state.
⩥ Claims Department. Answer: The claims department is responsible for
processing, investigating, and paying claims.
⩥ Divisible Surplus. Answer: the amount of earnings paid to
policyowners as dividends after the insurance company sets aside funds
required to cover reserves, operating expenses, and general business
purposes
,⩥ Domestic Insurer. Answer: An insurer with its principal or home
office in a state where it is authorized.
⩥ Foreign Insurer. Answer: An insurer with its principal office or
domicile location in a state different from the state it is transacting
insurance business.
⩥ Fraternal Benefit Society. Answer: Fraternal Benefit Societies are
nonprofit benevolent organizations that provide insurance to its
members.
⩥ Industrial Insurer. Answer: They make up a specialized branch of the
industry, primarily providing policies with small face amounts with
weekly premiums. Other names for industrial insurers include home
service or debit insurers.
⩥ Insurance. Answer: The transfer of risk through the pooling or
accumulation of funds.
⩥ Insured. Answer: The customer receiving insurance protection under
an insurance policy.
⩥ Insurer. Answer: the insurance company
,⩥ Lloyds of London. Answer: NOT an insurer, but a group of
individuals and companies that underwrite unusual insurance.
⩥ Multi-line Insurer. Answer: an insurance company or independent
agent that provides a one-stop shop for businesses or individuals seeking
coverage for all their insurance needs. For example, many large insurers
offer individual policies for automobile, homeowner, long-term care, life
and health insurance needs.
⩥ How do Stock Companies work?. Answer: They are organized and
incorporated under state laws for the purpose of making a profit for
itsstockholders (shareholders).
⩥ Nonparticipating insurers. Answer: Normally stock insurers; the
policyholders do not participate in receiving dividends or electing the
board of directors, unless they are also astockholder of the company.
⩥ Mutual companies are owned by _____________.. Answer: Their
policyholders
⩥ Participating insurers. Answer: Mutual insurers; policyholders
PARTICIPATE in receiving dividends and electing the board of
directors. When declared,mutual company dividends are paid to the
policyholders.
, ⩥ Why are dividends from a stock insurer subject to taxation?. Answer:
They are considered to be profit.
⩥ Why are dividends from a participating insurer not subject to
taxation?. Answer: The dividends are considered to be a return of
premium. The only exception is if the policyowner chooses to let the
dividends sit and collect interest. In this case, only the accumulated
interest would be taxable
⩥ Mixed Insurer. Answer: Operates as both a participating and
nonparticipating insurer. Dividends can never be guaranteed.
⩥ __________ _________ _________ ___________ are classified by
the way they charge premium.. Answer: Strong Assessment Mutual
Companies
⩥ A pure assessment mutual company. Answer: operates based on loss-
sharing by group members. No premium is payable in advance. Instead,
each member is assessed an individual portion of losses that occur
⩥ An advance premium assessment mutual. Answer: charges a premium
at the beginning of the policy period. If the original premiums exceed
the operating expenses and losses, the surplus is returned to the
policyholders as dividends. However, if total premiums are not enough
to meet losses, additional assessments are levied against the members.
HEALTH EXAM REVIEW 2026 QUESTIONS
AND ANSWERS STUDY GUIDE
⩥ Alien Insurer. Answer: An Alien Insurer in the U.S. is an insurer
whose principal office and domiciled location is outside of the country.
⩥ Broker. Answer: Represents themselves and the insured (i.e., the client
or customer)
⩥ Captive Insurer. Answer: An issuer established and owned by a parent
firm for the purpose of insuring the parent firm's loss exposure.
⩥ Certificate of Authority. Answer: A license issued to an insurer by a
department of insurance3 (or equivalent state agency), which authorizes
that company to conduct insurance business in that particular state.
⩥ Claims Department. Answer: The claims department is responsible for
processing, investigating, and paying claims.
⩥ Divisible Surplus. Answer: the amount of earnings paid to
policyowners as dividends after the insurance company sets aside funds
required to cover reserves, operating expenses, and general business
purposes
,⩥ Domestic Insurer. Answer: An insurer with its principal or home
office in a state where it is authorized.
⩥ Foreign Insurer. Answer: An insurer with its principal office or
domicile location in a state different from the state it is transacting
insurance business.
⩥ Fraternal Benefit Society. Answer: Fraternal Benefit Societies are
nonprofit benevolent organizations that provide insurance to its
members.
⩥ Industrial Insurer. Answer: They make up a specialized branch of the
industry, primarily providing policies with small face amounts with
weekly premiums. Other names for industrial insurers include home
service or debit insurers.
⩥ Insurance. Answer: The transfer of risk through the pooling or
accumulation of funds.
⩥ Insured. Answer: The customer receiving insurance protection under
an insurance policy.
⩥ Insurer. Answer: the insurance company
,⩥ Lloyds of London. Answer: NOT an insurer, but a group of
individuals and companies that underwrite unusual insurance.
⩥ Multi-line Insurer. Answer: an insurance company or independent
agent that provides a one-stop shop for businesses or individuals seeking
coverage for all their insurance needs. For example, many large insurers
offer individual policies for automobile, homeowner, long-term care, life
and health insurance needs.
⩥ How do Stock Companies work?. Answer: They are organized and
incorporated under state laws for the purpose of making a profit for
itsstockholders (shareholders).
⩥ Nonparticipating insurers. Answer: Normally stock insurers; the
policyholders do not participate in receiving dividends or electing the
board of directors, unless they are also astockholder of the company.
⩥ Mutual companies are owned by _____________.. Answer: Their
policyholders
⩥ Participating insurers. Answer: Mutual insurers; policyholders
PARTICIPATE in receiving dividends and electing the board of
directors. When declared,mutual company dividends are paid to the
policyholders.
, ⩥ Why are dividends from a stock insurer subject to taxation?. Answer:
They are considered to be profit.
⩥ Why are dividends from a participating insurer not subject to
taxation?. Answer: The dividends are considered to be a return of
premium. The only exception is if the policyowner chooses to let the
dividends sit and collect interest. In this case, only the accumulated
interest would be taxable
⩥ Mixed Insurer. Answer: Operates as both a participating and
nonparticipating insurer. Dividends can never be guaranteed.
⩥ __________ _________ _________ ___________ are classified by
the way they charge premium.. Answer: Strong Assessment Mutual
Companies
⩥ A pure assessment mutual company. Answer: operates based on loss-
sharing by group members. No premium is payable in advance. Instead,
each member is assessed an individual portion of losses that occur
⩥ An advance premium assessment mutual. Answer: charges a premium
at the beginning of the policy period. If the original premiums exceed
the operating expenses and losses, the surplus is returned to the
policyholders as dividends. However, if total premiums are not enough
to meet losses, additional assessments are levied against the members.
