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XCEL Chapter 4 Exam Review (1) Questions and Answers
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XCEL Chapter 4 Exam Review (1) Questions and Answers
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XCEL Chapter 4 Exam Review (1)Questions and Answers
Decreasing term policies - Answers -EX. mortgages. Policy amount decreases as the
outstanding mortgage balance decreases each year
Term policies - Answers -Renewable, convertible, or renewable AND convertible
Nonforfeiture values - Answers -Cash value
The MEC tends to be an investment vehicle - Answers -Pre-death distributions from a
modified endowment contract (MEC) receive different tax treatment than other life
insurance policies because
Pre-death distributions will become taxable - Answers -Under a Modified Endowment
Contract, what are the likely tax consequences?
Universal life - Answers -Type of life insurance combines a savings element along with
a flexible premium option
Survivorship life policy - Answers -Pays on the death of the last person
Single premium cash value policy - Answers -A policy that is paid up after only one
payment
Will no longer provide insurance protection - Answers -Shawn, Mike, and Dave are
brothers who have a $100,000 "first to die" joint life policy covering all three of their
lives. If Mike dies first, the policy proceeds
Non-medical - Answers -Which of the following is a life insurance policy that does NOT
require a physical exam?
A nonforfeiture option can be used to increase the death benefit - Answers -All of these
are valid options for an Adjustable Life Policy EXCEPT
Pre-death distributions are typically taxable - Answers -Which of these describes the
result of a modified endowment contract that failed to meet the seven-pay test?
Require a higher premium payable at each renewal - Answers -In a renewable term life
insurance policy, the contract will usually
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