XCEL practice exam with 100% Correct Answers 2023

A potential client, age 40, would like to purchase a Whole Life policy that will accumulate cash value at a faster rate in the early years of the policy. Which of these statements made by the producer would be correct? - Correct answer-20-Pay Life accumulates cash value faster than Straight Life A variable insurance policy: - Correct answer-does not guarantee a return on its investment accounts A Renewable Term Policy is renewable at the option of the: - Correct answer-Insured Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? - Correct answer-Variable Life Which of the following actions is NOT possible with a Universal Life policy? - Correct answer-Premiums may be applied as a credit against income tax Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - Correct answer-conversion What type of policy would offer a 40-year old the quickest accumulation of cash value? - Correct answer-20-pay life A 42-year-old executive wants to purchase life insurance that will allow for increases or decreases to coverage as his/her needs change. Which of the following policies will best meet this need? - Correct answer-Universal Life J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? - Correct answer-20-pay Life All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for: - Correct answer-Modified Whole Life All of these are characteristics of an Adjustable Life policy, EXCEPT: - Correct answerface amount can be adjusted using policy dividends What kind of special need would a policyowner require with an Adjustable Life insurance policy? - Correct answer-flexible premiums K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - Correct answer-$20,000 death benefit What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death? - Correct answer-Face amount plus the policy's cash value Variable Life products require a producer to - Correct answer-hold a Life Insurance license and a Securities license What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100? - Correct answer-whole life Q would like to purchase $100,000 of permanent protection on his wife and $50,000 of Term coverage on himself under the same policy. What kind of policy should Q purchase? - Correct answer-Whole life policy with other insured rider Which of the following types of policies pays a benefit if the insured goes blind? - Correct answer-AD&D All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: - Correct answer-The premiums can be lowered or raised, based on investment performance M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is - Correct answer-Modified Premium Life Additional coverage can be added to a Whole Life policy by adding a(n): - Correct answer-decreasing term rider 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: - Correct answerpolicy proceeds Which provision prevents an insurer from changing the terms of the contract with the policyowner by referring to documents not found within the policy itself? - Correct answer-Entire Contract provision S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? - Correct answer-$50,000 A policy loan is made possible by which of these life insurance policy features? - Correct answer-Cash value provision What is the Suicide provision designed to do? - Correct answer-safeguard the insurer from an applicant who is contemplating suicide In a Life insurance contract, an insurance company's promise to pay stated benefits is called the: - Correct answer-Insuring clause The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and - Correct answer-the initial premium D was actively serving in the Marines when he was killed in an automobile accident while on leave. His $100,000 Whole life policy contains a War Exclusion clause. How much will D's beneficiary's receive? - Correct answer-The full face amount N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? - Correct answer-exclusion Which statement is TRUE in regards to a policy loan? - Correct answer-Past-due interest on a policy loan is added to the total debt When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n): - Correct answer-exclusion S would like to use dividends from her life insurance policy to purchase paid-up additions. All of these would be factors that determine how much coverage can be purchased EXCEPT - Correct answer-beneficiary's age Which life insurance rider typically appears on a Juvenile life insurance policy? - Correct answer-payor benefit rider How are surrender charges deducted in a life policy with a rear-end loaded provision? - Correct answer-Deducted when the policy is discontinued The Consideration clause in a life insurance contract contains what pertinent information? - Correct answer-Amount of premium payments and when they are due In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? - Correct answer-Owner's Rights Which rider provides coverage for a child under a parent's life insurance policy? - Correct answer-Child term rider Whose life is covered on a life insurance policy that contains a payor benefit clause? - Correct answer-child The agreement in a life insurance contract that states a specific sum of money will be paid to a designated person upon an insured's death is called a(n): - Correct answerM purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son? - Correct answer-Revocable A level premium indicates: - Correct answer-the premium is fixed for the entire duration of the contract What percent of personal life insurance premiums is usually deductible for federal income tax purposes? - Correct answer-0% What is the underlying concept regarding level premiums? - Correct answer-The early years are charged more than what is needed C is trying to determine whether to convert her convertible term life policy to whole life insurance using her original age or attained age. What factor would affect her decision the most? - Correct answer-the cost When can a policyowner change a revocable beneficiary? - Correct answer-anytime Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - Correct answer-Life Income A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? - Correct answer-irrevocable On a life insurance policy, who is qualified to change the beneficiary designation? - Correct answer-Policyowner T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary? - Correct answer-Request of the change will be refused Which of the following best describes a contingent beneficiary? - Correct answerPerson designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? - Correct answer-$0 Which of the following statements is CORRECT regarding the tax treatment of a lumpsum payment paid to a life insurance policy's primary beneficiary? - Correct answer-All proceeds are income tax free in the year they are received Quarterly premium payments increase the annual cost of insurance because - Correct answer-interest to the insurer is decreased while the administrative costs are increased A policyowner is allowed to pay premiums more than once a year under which provision? - Correct answer-Mode of Premium What is the purpose of a Policy Summary? - Correct answer-It highlights the critical parts of the policy issued A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? - Correct answer-Aviation exclusion A life insurance application must be signed by all of these, EXCEPT: - Correct answerbeneficiary An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - Correct answer-When the conditions of the receipt are met Which parts of a life insurance policy are guaranteed to be true? - Correct answerwarranty Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? - Correct answer-Risk classification Which of the following statements is CORRECT about an agent who is taking an insurance application? - Correct answer-The agent should have the applicant initial any changes made on the application Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT: - Correct answer-Signed HIPAA disclosure The USA Patriot Act was enacted in: - Correct answer-2001 A Medical Information Report (MIB) report may disclose which of the following: - Correct answer-Prior use of marjuana At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid? - Correct answer-At the time of application What would the Medical Information Bureau (MIB) identify? - Correct answer-Testing positive for marijuana use from a previous screening What is the purpose of the U.S.A. Patriot Act? - Correct answer-detect and deter terrorism An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the: - Correct answer-applicant's physician P is a producer who notices 5 questions on a life application were not answered. What actions should P take? - Correct answer-Set up a meeting with the applicant to answer the remaining questions Group life insurance policies are generally written as: - Correct answer-annually renewable term What type of group insurance plan involves employees sharing the cost? - Correct answer-contributory plan Which of the following statements about noncontributory employee group life insurance is FALSE? - Correct 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? - Correct 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? - Correct 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? - Correct 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: - Correct answer-$25,000 individual whole life policy When an employee is terminated, which statement about a group term life conversion is true? - Correct 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? - Correct answer-Contributory Which provision is NOT a requirement in a group life policy? - Correct answeraccidental What is considered to be a characteristic of an immediate annuity? - Correct answerBenefit 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? - Correct 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 - Correct 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? - Correct answer-Fixed Deferred What type of annuity has a cash value that is based upon the performance of it's underlying investment funds? - Correct 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? - Correct 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? - Correct answer-Life Annuity with Period Certain Which of the following annuities pays benefits based on units rather than specific dollar amounts? - Correct answer-Variable annuity Which of the following is NOT included in an annuity contract? - Correct answer-AD&D rider The type of annuity that can be purchased with one monetary deposit is called a(n): - Correct answer-immediate annuity Which of the following does Social Security NOT provide benefits for? - Correct answerdismemberment All of these are considered to be a benefit under Social Security, EXCEPT for: - Correct 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? - Correct answer-5 months Which of the following factors affects the amount of monthly disability benefits payable under Social Security? - Correct ans