XCEL CHAPTER 5 EXAM 2025
QUESTIONS AND ANSWERS
Which of these factors help determine an insured's life insurance premium? - ANS avocation
(hobby)
What is created after policy proceeds are obtained in a lump sum and then immediately
invested? - ANS Estate
Sharon is the policyowner of a $50,000 life insurance policy. Her son, Mike, is the beneficiary. If
Sharon MUST obtain Mike's signature in order to change the beneficiary, what kind of
beneficiary designation is this? - ANS Irrevocable
Which of the following enables a life policy to be replaced with another life policy and results in
the postponement of the tax consequence? - ANS Section 1035 exchange
1 @COPYRIGHT THEBRIGHT 2025/2026
, How does life insurance create an immediate estate? - ANS After first premium is paid, the
face amount may be available to the beneficiary
Which type of beneficiary should be named if the insured wants to give explicit directions on
how the policy proceeds should be paid? - ANS Individual
What is the primary feature of a viatical settlement? - ANS Reduced death benefit
prepayment
Naming a contingent beneficiary as "all surviving children" is described by which term? -
ANS Class designation
Which settlement option involves having the proceeds remain with the insurer and earnings
paid on a monthly basis to the beneficiary? - ANS interest only
Which of these ensures that proceeds of a life insurance policy will be free from attachment or
seizure by the beneficiary's creditors? - ANS Spendthrift Clause
2 @COPYRIGHT THEBRIGHT 2025/2026
QUESTIONS AND ANSWERS
Which of these factors help determine an insured's life insurance premium? - ANS avocation
(hobby)
What is created after policy proceeds are obtained in a lump sum and then immediately
invested? - ANS Estate
Sharon is the policyowner of a $50,000 life insurance policy. Her son, Mike, is the beneficiary. If
Sharon MUST obtain Mike's signature in order to change the beneficiary, what kind of
beneficiary designation is this? - ANS Irrevocable
Which of the following enables a life policy to be replaced with another life policy and results in
the postponement of the tax consequence? - ANS Section 1035 exchange
1 @COPYRIGHT THEBRIGHT 2025/2026
, How does life insurance create an immediate estate? - ANS After first premium is paid, the
face amount may be available to the beneficiary
Which type of beneficiary should be named if the insured wants to give explicit directions on
how the policy proceeds should be paid? - ANS Individual
What is the primary feature of a viatical settlement? - ANS Reduced death benefit
prepayment
Naming a contingent beneficiary as "all surviving children" is described by which term? -
ANS Class designation
Which settlement option involves having the proceeds remain with the insurer and earnings
paid on a monthly basis to the beneficiary? - ANS interest only
Which of these ensures that proceeds of a life insurance policy will be free from attachment or
seizure by the beneficiary's creditors? - ANS Spendthrift Clause
2 @COPYRIGHT THEBRIGHT 2025/2026
