XCEL Practice Exams With Correct Detailed Answers.
What type of group insurance plan involves employees sharing the cost? - ANSWER-
contributory plan
Which of the following statements about noncontributory employee group life
insurance is FALSE? - ANSWER- A minimum number of employees is required to
participate
Which requirement must be met for an association to be eligible for a group life plan?
- ANSWER- Group was formed for a purpose other than acquiring insurance
Under a trustee group life policy, who would be eligible for a certificate of coverage?
- ANSWER- employee
S, while in the process of converting her group life insurance to an individual policy,
dies. What happens to the claim her beneficiary submits? - ANSWER- Full benefits are
payable under the Master contract
An employee with $25,000 group term life coverage was recently fired. This
employee's group coverage may be converted to a: - ANSWER- $25,000 individual
whole life policy
When an employee is terminated, which statement about a group term life
conversion is true? - ANSWER- Policy proceeds will be paid if the employee dies
during the conversion period
If its employees share in the cost of insurance, what type of group life insurance plan
would a corporation have? - ANSWER- Contributory
Which provision is NOT a requirement in a group life policy? - ANSWER- accidental
What is considered to be a characteristic of an immediate annuity? - ANSWER-
Benefit payments start within one payment period of purchase
P is a forty year old woman and would like to purchase an annuity that will provide a
lifetime income stream beginning at age sixty. Which of the following did she NOT
buy? - ANSWER- An immediate annuity
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices, EXCEPT a -
ANSWER- Immediate annuity
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age
70 for life. What type of annuity did N purchase? - ANSWER- Fixed Deferred
,What type of annuity has a cash value that is based upon the performance of it's
underlying investment funds? - ANSWER- variable
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
T has an annuity that guarantees an income payment for the rest of his life. The
contract also guarantees that if T dies before receiving payments for 20 years, the
remaining payments will be paid to his son for the balance of the 20 years. What type
of annuity is this? - ANSWER- Life Annuity with Period Certain
Which of the following annuities pays benefits based on units rather than specific
dollar amounts? - ANSWER- Variable annuity
Which of the following is NOT included in an annuity contract? - ANSWER- AD&D rider
The type of annuity that can be purchased with one monetary deposit is called a(n): -
ANSWER- immediate annuity
Which of the following does Social Security NOT provide benefits for? - ANSWER-
dismemberment
All of these are considered to be a benefit under Social Security, EXCEPT for: -
ANSWER- unemployment
Q is severely injured in an automobile accident and becomes totally disabled. How
many months must Q be disabled before being able to apply for Social Security
disability benefits? - ANSWER- 5 months
Which of the following factors affects the amount of monthly disability benefits
payable under Social Security? - ANSWER- The amount of the benefits available from
other sources
What is Old Age and Survivors Health Insurance (OASDHI) also known as? - ANSWER-
social security
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? - ANSWER-
$2,500
All of the following statements about traditional individual retirement accounts are
false EXCEPT - ANSWER- 10% penalty is applied to withdrawals before age 59 1/2
, In a qualified retirement plan, the yearly contributions to an employee's account: -
ANSWER- are restricted to maximum levels set by the IRS
Post-tax dollar contributions are found in: - ANSWER- Roth IRA investments
An individual participant personally received eligible rollover funds from a profit-
sharing plan. What is the income tax withholding requirements for this transaction? -
ANSWER- 20% is withheld for income taxes
Which tax would an IRA participant be subjected to on distributions received prior to
age 59 1/2? - ANSWER- Ordinary income tax and a 10% tax penalty for early
withdrawal
What type of employee welfare plans are not subject to ERISA regulations? -
ANSWER- Church plans
Which of the following is TRUE about a qualified retirement that is "top heavy"? -
ANSWER- More than 60% of plan assets are in key employee accounts
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing
Plan and then deposits this amount into a personal savings account. This action
would result in: - ANSWER- Income tax and a 10% penalty assessed upon funds
withdrawn from the Qualified Plan
A qualified profit-sharing plan is designed to: - ANSWER- allow employees to
participate in the profits of the company
In life insurance, the needs approach is used mostly to establish: - ANSWER- how
much life insurance a client should apply for
In a Key Employee life insurance policy, the third-party owner can be all of the
following, EXCEPT: - ANSWER- insured
Which statement regarding a Key Employee Life policy is NOT true? - ANSWER- The
beneficiary is named by the key employee
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? - ANSWER- ABC is the
policyowner, C is the insured, and ABC is the beneficiary
Which of these is NOT a reason for purchasing life insurance on the life of a minor? -
ANSWER- If both parents were to die, it would provide death benefits to the child
Which of the following claims are typically excluded from Medical expense policies?
- ANSWER- Intentionally self-inflicted injuries
What type of group insurance plan involves employees sharing the cost? - ANSWER-
contributory plan
Which of the following statements about noncontributory employee group life
insurance is FALSE? - ANSWER- A minimum number of employees is required to
participate
Which requirement must be met for an association to be eligible for a group life plan?
- ANSWER- Group was formed for a purpose other than acquiring insurance
Under a trustee group life policy, who would be eligible for a certificate of coverage?
- ANSWER- employee
S, while in the process of converting her group life insurance to an individual policy,
dies. What happens to the claim her beneficiary submits? - ANSWER- Full benefits are
payable under the Master contract
An employee with $25,000 group term life coverage was recently fired. This
employee's group coverage may be converted to a: - ANSWER- $25,000 individual
whole life policy
When an employee is terminated, which statement about a group term life
conversion is true? - ANSWER- Policy proceeds will be paid if the employee dies
during the conversion period
If its employees share in the cost of insurance, what type of group life insurance plan
would a corporation have? - ANSWER- Contributory
Which provision is NOT a requirement in a group life policy? - ANSWER- accidental
What is considered to be a characteristic of an immediate annuity? - ANSWER-
Benefit payments start within one payment period of purchase
P is a forty year old woman and would like to purchase an annuity that will provide a
lifetime income stream beginning at age sixty. Which of the following did she NOT
buy? - ANSWER- An immediate annuity
W is a 39-year old female who just purchased an annuity to provide income for life
starting at age 60. All of these would be acceptable annuity choices, EXCEPT a -
ANSWER- Immediate annuity
N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age
70 for life. What type of annuity did N purchase? - ANSWER- Fixed Deferred
,What type of annuity has a cash value that is based upon the performance of it's
underlying investment funds? - ANSWER- variable
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
T has an annuity that guarantees an income payment for the rest of his life. The
contract also guarantees that if T dies before receiving payments for 20 years, the
remaining payments will be paid to his son for the balance of the 20 years. What type
of annuity is this? - ANSWER- Life Annuity with Period Certain
Which of the following annuities pays benefits based on units rather than specific
dollar amounts? - ANSWER- Variable annuity
Which of the following is NOT included in an annuity contract? - ANSWER- AD&D rider
The type of annuity that can be purchased with one monetary deposit is called a(n): -
ANSWER- immediate annuity
Which of the following does Social Security NOT provide benefits for? - ANSWER-
dismemberment
All of these are considered to be a benefit under Social Security, EXCEPT for: -
ANSWER- unemployment
Q is severely injured in an automobile accident and becomes totally disabled. How
many months must Q be disabled before being able to apply for Social Security
disability benefits? - ANSWER- 5 months
Which of the following factors affects the amount of monthly disability benefits
payable under Social Security? - ANSWER- The amount of the benefits available from
other sources
What is Old Age and Survivors Health Insurance (OASDHI) also known as? - ANSWER-
social security
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? - ANSWER-
$2,500
All of the following statements about traditional individual retirement accounts are
false EXCEPT - ANSWER- 10% penalty is applied to withdrawals before age 59 1/2
, In a qualified retirement plan, the yearly contributions to an employee's account: -
ANSWER- are restricted to maximum levels set by the IRS
Post-tax dollar contributions are found in: - ANSWER- Roth IRA investments
An individual participant personally received eligible rollover funds from a profit-
sharing plan. What is the income tax withholding requirements for this transaction? -
ANSWER- 20% is withheld for income taxes
Which tax would an IRA participant be subjected to on distributions received prior to
age 59 1/2? - ANSWER- Ordinary income tax and a 10% tax penalty for early
withdrawal
What type of employee welfare plans are not subject to ERISA regulations? -
ANSWER- Church plans
Which of the following is TRUE about a qualified retirement that is "top heavy"? -
ANSWER- More than 60% of plan assets are in key employee accounts
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing
Plan and then deposits this amount into a personal savings account. This action
would result in: - ANSWER- Income tax and a 10% penalty assessed upon funds
withdrawn from the Qualified Plan
A qualified profit-sharing plan is designed to: - ANSWER- allow employees to
participate in the profits of the company
In life insurance, the needs approach is used mostly to establish: - ANSWER- how
much life insurance a client should apply for
In a Key Employee life insurance policy, the third-party owner can be all of the
following, EXCEPT: - ANSWER- insured
Which statement regarding a Key Employee Life policy is NOT true? - ANSWER- The
beneficiary is named by the key employee
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? - ANSWER- ABC is the
policyowner, C is the insured, and ABC is the beneficiary
Which of these is NOT a reason for purchasing life insurance on the life of a minor? -
ANSWER- If both parents were to die, it would provide death benefits to the child
Which of the following claims are typically excluded from Medical expense policies?
- ANSWER- Intentionally self-inflicted injuries
