XCEL practice exams
All of the following statements about traditional individual retirement accounts are false EXCEPT
10% penalty is applied to withdrawals before age 59 1/2
What is considered to be a characteristic of an immediate annuity?
Benefit payments start within one payment period of purchase
A policy loan is made possible by which of these life insurance policy features?
Cash value provision
Which rider provides coverage for a child under a parent's life insurance policy?
Child term rider
If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have?
Contributory
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?
exclusion
When an insurer issues a policy that refuses to cover certain risks, this is referred to as a(n):
exclusion
All of these are characteristics of an Adjustable Life policy, EXCEPT:
face amount can be adjusted using policy dividends
What kind of special need would a policyowner require with an Adjustable Life insurance policy?
flexible premiums
Variable Life products require a producer to
hold a Life Insurance license and a Securities license
The type of annuity that can be purchased with one monetary deposit is called a(n):
immediate annuity
Quarterly premium payments increase the annual cost of insurance because
interest to the insurer is decreased while the administrative costs are increased
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?
irrevocable
Which parts of a life insurance policy are guaranteed to be true?
warranty
What kind of life policy either pays the face value upon the death of the insured or when the insured reaches age 100?
whole life
A Medical Information Report (MIB) report may disclose which of the following:
Prior use of marjuana
Under a trustee group life policy, who would be eligible for a certificate of coverage?
employee
At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?
At the time of application
A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following?
Aviation exclusion
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?
$0
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?
$2,500
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?
$20,000 death benefit
An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a:
$25,000 individual whole life policy
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?
$50,000
What percent of personal life insurance premiums is usually deductible for federal income tax purposes?
0%
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
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?
20-Pay Life accumulates cash value faster than Straight 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?
20-pay Life
What type of policy would offer a 40-year old the quickest accumulation of cash value?
20-pay life
The USA Patriot Act was enacted in:
2001
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?
5 months
Which of the following statements about noncontributory employee group life insurance is FALSE?
A minimum number of employees is required to participate
Which of the following types of policies pays a benefit if the insured goes blind?
AD&D
Which of the following is NOT included in an annuity contract?
AD&D rider
Which of the following statements is CORRECT regarding the tax treatment of a lump-sum payment paid to a life insurance policy's primary beneficiary?
All proceeds are income tax free in the year they are received
The Consideration clause in a life insurance contract contains what pertinent information?
Amount of premium payments and when they are due
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?
An immediate annuity
How are surrender charges deducted in a life policy with a rear-end loaded provision?
Deducted when the policy is discontinued
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?
Entire Contract provision
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face amount plus the policy's cash value
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?
Fixed Deferred
S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits?
Full benefits are payable under the Master contract
Which requirement must be met for an association to be eligible for a group life plan?
Group was formed for a purpose other than acquiring insurance
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
Immediate annuity
A Renewable Term Policy is renewable at the option of the:
Insured
In a Life insurance contract, an insurance company's promise to pay stated benefits is called the:
Insuring clause
What is the purpose of a Policy Summary?
It highlights the critical parts of the policy issued
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?
Life Annuity with Period Certain
Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?
Life Income
A policyowner is allowed to pay premiums more than once a year under which provision?
Mode of Premium
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
Modified Premium Life
All of these insurance products require an agent to have proper FINRA securities registration in order to sell them, EXCEPT for:
Modified Whole Life
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?
Owner's Rights
Which statement is TRUE in regards to a policy loan?
Past-due interest on a policy loan is added to the total debt
Which of the following best describes a contingent beneficiary?
Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured
When an employee is terminated, which statement about a group term life conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
On a life insurance policy, who is qualified to change the beneficiary designation?
Policyowner
Which of the following actions is NOT possible with a Universal Life policy?
Premiums may be applied as a credit against income tax
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?
Request of the change will be refused
M 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?
Revocable
Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?
Risk classification
Post-tax dollar contributions are found in:
Roth IRA investments
P is a producer who notices 5 questions on a life application were not answered. What actions should P take?
Set up a meeting with the applicant to answer the remaining questions
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following, EXCEPT:
Signed HIPAA disclosure
What would the Medical Information Bureau (MIB) identify?
Testing positive for marijuana use from a previous screening
Which of the following statements is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application
Which of the following factors affects the amount of monthly disability benefits payable under Social Security?
The amount of the benefits available from other sources
What is the underlying concept regarding level premiums?
The early years are charged more than what is needed
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?
The full face amount
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT:
The premiums can be lowered or raised, based on investment performance
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?
Universal Life
Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options?
Variable Life
Which of the following annuities pays benefits based on units rather than specific dollar amounts?
Variable annuity
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
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?
Whole life policy with other insured rider
Which provision is NOT a requirement in a group life policy?
accidental
Group life insurance policies are generally written as:
annually renewable term
When can a policyowner change a revocable beneficiary?
anytime
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the:
applicant's physician
In a qualified retirement plan, the yearly contributions to an employee's account:
are restricted to maximum levels set by the IRS
A life insurance application must be signed by all of these, EXCEPT:
beneficiary
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
beneficiary's age
Whose life is covered on a life insurance policy that contains a payor benefit clause?
child
What type of group insurance plan involves employees sharing the cost?
contributory plan
Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health?
conversion
Additional coverage can be added to a Whole Life policy by adding a(n):
decreasing term rider
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?
deferred
What is the purpose of the U.S.A. Patriot Act?
detect and deter terrorism
Which of the following does Social Security NOT provide benefits for?
dismemberment
A variable insurance policy:
does not guarantee a return on its investment accounts
Which life insurance rider typically appears on a Juvenile life insurance policy?
payor benefit 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:
policy proceeds
What is the Suicide provision designed to do?
safeguard the insurer from an applicant who is contemplating suicide
What is Old Age and Survivors Health Insurance (OASDHI) also known as?
social security
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?
the cost
The Consideration clause in a life insurance policy indicates that a policyowner's consideration consists of a completed application and
the initial premium
A level premium indicates:
the premium is fixed for the entire duration of the contract
All of these are considered to be a benefit under Social Security, EXCEPT for:
unemployment
What type of annuity has a cash value that is based upon the performance of it's underlying investment funds?
variable
