QUESTIONS AND CORRECT ANSWERS -

Xcel solutions life insurance ACTUAL EXAM 200

QUESTIONS AND CORRECT ANSWERS -

LATEST COVERING ALL RECENT TESTED QUESTIONS

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What does the Group Life underwriting risk selection process help protect insurance companies from? - CORRECT ANSWER-Adverse selection is the tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others.

All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT

• CORRECT ANSWER-Withdrawing funds from a qualified plan for the purpose of purchasing stocks

or other securities would trigger a 10% tax penalty.

Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? - CORRECT ANSWER-Decreasing term insurance is normally used to pay off a mortgage balance in the event of death of the insured.

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? - CORRECT ANSWER-An irrevocable beneficiary designation requires the beneficiary's signature.

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt - CORRECT ANSWER-Matt's beneficiary will be provided with the double indemnity ride if Matt dies instantly from a car accident.

Which type of policy combines the flexibility of a Universal Life Policy with investment choices? - CORRECT ANSWER-When the structure and flexibility of a universal life policy are combined with investment choices, the result is a variable universal life policy.

Which situation accurately describes a reduced paid-up nonforfeiture option? - CORRECT ANSWER- Policy has a decreased face amount. With a reduced paid-up nonforfeiture option, the policy will have a decreased face amount.

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Interest on benefits of a life insurance policy shall begin to accrue ____ days from the date of receipt of proof of death by the insurer. - CORRECT ANSWER-30. Interest on benefits of a life insurance policy shall begin to accrue 30 days from the date of receipt of proof of death by the insurer.

A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the - CORRECT ANSWER-named living primary beneficiaries. "Per capita" is a method of life insurance distribution using total number of individuals.

Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation or hobbies? - CORRECT ANSWER-An individual who is not acceptable by an insurer at standard rates because of health history, occupation or hobbies is called substandard risk.

All of these are standard exclusions found in a life insurance policy EXCEPT - CORRECT ANSWER- Disability is not one of the standard exclusions found in life insurance policies.

The premium for a modified whole life policy is - CORRECT ANSWER-lower than the typical whole life policy during the first few years and then higher than typical for the remainder

Naming a contingent beneficiary as "all surviving children" is described by which term? - CORRECT ANSWER-Class designation

The fair credit reporting act protects consumers - CORRECT ANSWER-with guidelines regarding credit reporting and distribution

Which of the following is present when an applicant stands to lose value if the insured dies? - CORRECT ANSWER-insurable interest

Which of the following is a reinstatement condition? - CORRECT ANSWER-Proof of insurability

An insurer has a right to screen applicants for HIV in which of the following ways? - CORRECT ANSWER-Blood test for HIV

All of these are common exclusions to a life insurance policy EXCEPT - CORRECT ANSWER-accidental death

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A policyowner can receive an immediate payment before the insured dies by using a(n) - CORRECT ANSWER-viatical settlement contract

All of the following are examples of pure risk EXCEPT - CORRECT ANSWER-Losing money at a casino

Which of these would be the best example of a limited pay life insurance policy? - CORRECT ANSWER-Whole life policy with premiums paid up after 20 years

Who is responsible for assembling the policy forms for insureds? - CORRECT ANSWER-Insurance carriers

If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if

• CORRECT ANSWER-the insured outlived the beneficiary

Insurability interest does NOT occur in which of the following relationships? - CORRECT ANSWER- Business owner and business client

Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death.In this situation, who will receive Bob's policy proceeds? - CORRECT ANSWER-Tom

What is the primary purpose of a rating service company such as A.M Best? - CORRECT ANSWER- Determine financial strength of an insurance company

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments? - CORRECT ANSWER-period certain

An example of naming a beneficiary by class would be - CORRECT ANSWER-"To the children born of my union with Ned Jackson"

A waiver of premium rider allows an insured to waive premium payments if the insured is - CORRECT ANSWER-completely and permanently disabled

The authority granted to a licensed producer is provided via the - CORRECT ANSWER-Law of Agency

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