XCEL Practice Exams With Correct
Detailed Answers.
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? - ANSWER- 20-Pay Life
accumulates cash value faster than Straight Life
A variable insurance policy: - ANSWER- does not guarantee a return on its investment
accounts
A Renewable Term Policy is renewable at the option of the: - 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? - ANSWER- Variable Life
Which of the following actions is NOT possible with a Universal Life policy? - 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? - ANSWER- conversion
What type of policy would offer a 40-year old the quickest accumulation of cash value? -
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? - 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? - 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: - ANSWER- Modified Whole Life
All of these are characteristics of an Adjustable Life policy, EXCEPT: - ANSWER- face
amount can be adjusted using policy dividends
What kind of special need would a policyowner require with an Adjustable Life
insurance policy? - 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? -
ANSWER- $20,000 death benefit
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - ANSWER- Face amount plus the policy's cash value
Variable Life products require a producer to - 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? - 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? - ANSWER- Whole life policy with other insured rider
Which of the following types of policies pays a benefit if the insured goes blind? -
ANSWER- AD&D
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: -
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 - ANSWER-
Modified Premium Life
Additional coverage can be added to a Whole Life policy by adding a(n): - 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: - ANSWER- policy
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? - 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? - ANSWER- $50,000
A policy loan is made possible by which of these life insurance policy features? -
ANSWER- Cash value provision
, What is the Suicide provision designed to do? - 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: - ANSWER- Insuring clause
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and - 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? - 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? -
ANSWER- exclusion
Which statement is TRUE in regards to a policy loan? - 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): - 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 - ANSWER- beneficiary's age
Which life insurance rider typically appears on a Juvenile life insurance policy? -
ANSWER- payor benefit rider
How are surrender charges deducted in a life policy with a rear-end loaded provision? -
ANSWER- Deducted when the policy is discontinued
The Consideration clause in a life insurance contract contains what pertinent
information? - 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? - ANSWER- Owner's Rights
Which rider provides coverage for a child under a parent's life insurance policy? -
ANSWER- Child term rider
Whose life is covered on a life insurance policy that contains a payor benefit clause? -
ANSWER- child
Detailed Answers.
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? - ANSWER- 20-Pay Life
accumulates cash value faster than Straight Life
A variable insurance policy: - ANSWER- does not guarantee a return on its investment
accounts
A Renewable Term Policy is renewable at the option of the: - 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? - ANSWER- Variable Life
Which of the following actions is NOT possible with a Universal Life policy? - 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? - ANSWER- conversion
What type of policy would offer a 40-year old the quickest accumulation of cash value? -
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? - 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? - 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: - ANSWER- Modified Whole Life
All of these are characteristics of an Adjustable Life policy, EXCEPT: - ANSWER- face
amount can be adjusted using policy dividends
What kind of special need would a policyowner require with an Adjustable Life
insurance policy? - 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? -
ANSWER- $20,000 death benefit
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's
death? - ANSWER- Face amount plus the policy's cash value
Variable Life products require a producer to - 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? - 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? - ANSWER- Whole life policy with other insured rider
Which of the following types of policies pays a benefit if the insured goes blind? -
ANSWER- AD&D
All of these statements about Equity Indexed Life Insurance are correct, EXCEPT: -
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 - ANSWER-
Modified Premium Life
Additional coverage can be added to a Whole Life policy by adding a(n): - 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: - ANSWER- policy
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? - 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? - ANSWER- $50,000
A policy loan is made possible by which of these life insurance policy features? -
ANSWER- Cash value provision
, What is the Suicide provision designed to do? - 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: - ANSWER- Insuring clause
The Consideration clause in a life insurance policy indicates that a policyowner's
consideration consists of a completed application and - 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? - 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? -
ANSWER- exclusion
Which statement is TRUE in regards to a policy loan? - 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): - 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 - ANSWER- beneficiary's age
Which life insurance rider typically appears on a Juvenile life insurance policy? -
ANSWER- payor benefit rider
How are surrender charges deducted in a life policy with a rear-end loaded provision? -
ANSWER- Deducted when the policy is discontinued
The Consideration clause in a life insurance contract contains what pertinent
information? - 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? - ANSWER- Owner's Rights
Which rider provides coverage for a child under a parent's life insurance policy? -
ANSWER- Child term rider
Whose life is covered on a life insurance policy that contains a payor benefit clause? -
ANSWER- child
