Xcel Life Insurance Exam 2025 Xcel Solutions
Life Insurance Exam
Fraternal Benefit Society has each of the following characteristics EXCEPT -
ANSWER>>exist for profit
An insurer's ability to make unpredictable payouts to policyowners is called -
ANSWER>>liquidity
The Fair Credit and Reporting Act's main purpose is to - ANSWER>>protect
consumers with guidelines regarding credit reporting distribution
A _______ company is owned by its shareholders. - ANSWER>>stock
An insurer's claim settlement practices are regulated by the - ANSWER>>State
insurance departments
What kind of life insurance policy issued by a mutual insurer provides a return
of divisible surplus? - ANSWER>>participating life insurance policy
Ken is a producer who has obtained Consumer Information Reports under false
pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty
that may be imposed on Ken? - ANSWER>>$5,000 and 1 year imprisonment
A type of insurer that is owned by its policyowners is called - ANSWER>>mutual
A life insurance company has transferred some of its risk to another insurer. The
insurer assuming the risk is called the - ANSWER>>reinsurer
Why are dividends from a mutual insurer not subject to taxation? -
ANSWER>>Because dividends are considered to be a return of premium
,What is known as the immediate specific event causing loss and giving rise to
risk? - ANSWER>>Peril
How do insurers predict the increase of individual risks? - ANSWER>>Law of
large numbers
Insurance companies determine risk exposure by which of the following? -
ANSWER>>Law of large numbers and risk pooling
All of the following are examples of pure risk EXCEPT - ANSWER>>losing money
at a casino (Pure risk is a category of risk in which loss is the only possible
outcome, which is the opposite of speculative risk. Gambling is considered a
speculative risk where there is a chance of either gain or loss.)
What are examples of pure risk? (3) - ANSWER>>1. Injured while playing
football
2. Falling at a casino and breaking a hip
3. Jewelry stolen during a home robbery
People with higher loss exposure have the tendency to purchase insurance
more often than those at average risk. This is called - ANSWER>>adverse
selection (the tendency of persons with higher loss exposure to purchase
insurance more often than those at average risk)
An example of risk sharing would be - ANSWER>>Doctors pooling their money
to cover malpractice exposures
The cause of a loss is referred to as a - ANSWER>>peril
Which of the following is considered to be an event or condition that increases
the probability of an insured's loss? - ANSWER>>hazard
, Insurance represents the process of risk - ANSWER>>transference
An individual who removes the risk of losing money in the stock market by
never purchasing stocks is said to be engaging in - ANSWER>>risk avoidance
In an insurance contract, the insurer is the only party legally obligated to
perform. Because of this, an insurance contract is considered -
ANSWER>>unilateral
What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - ANSWER>>representation
The power given to an individual producer that is not specifically addressed in
his/her contract is considered what type of authority? - ANSWER>>implied
In order for a contract to be valid, it must - ANSWER>>contain an offer and
acceptance
According to life insurance contract law, insurable interest exists - ANSWER>>at
the time of application
All of the following are elements of an insurance policy EXCEPT -
ANSWER>>claim forms
All of the following are elements of an insurance policy (3) - ANSWER>>1.
definitions
2. other insurance
3. conditions
Which type of clause describes the following statement: "We have issued the
policy in consideration of the representations in your applications and payment
of the first-term premium". - ANSWER>>consideration clause
Life Insurance Exam
Fraternal Benefit Society has each of the following characteristics EXCEPT -
ANSWER>>exist for profit
An insurer's ability to make unpredictable payouts to policyowners is called -
ANSWER>>liquidity
The Fair Credit and Reporting Act's main purpose is to - ANSWER>>protect
consumers with guidelines regarding credit reporting distribution
A _______ company is owned by its shareholders. - ANSWER>>stock
An insurer's claim settlement practices are regulated by the - ANSWER>>State
insurance departments
What kind of life insurance policy issued by a mutual insurer provides a return
of divisible surplus? - ANSWER>>participating life insurance policy
Ken is a producer who has obtained Consumer Information Reports under false
pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty
that may be imposed on Ken? - ANSWER>>$5,000 and 1 year imprisonment
A type of insurer that is owned by its policyowners is called - ANSWER>>mutual
A life insurance company has transferred some of its risk to another insurer. The
insurer assuming the risk is called the - ANSWER>>reinsurer
Why are dividends from a mutual insurer not subject to taxation? -
ANSWER>>Because dividends are considered to be a return of premium
,What is known as the immediate specific event causing loss and giving rise to
risk? - ANSWER>>Peril
How do insurers predict the increase of individual risks? - ANSWER>>Law of
large numbers
Insurance companies determine risk exposure by which of the following? -
ANSWER>>Law of large numbers and risk pooling
All of the following are examples of pure risk EXCEPT - ANSWER>>losing money
at a casino (Pure risk is a category of risk in which loss is the only possible
outcome, which is the opposite of speculative risk. Gambling is considered a
speculative risk where there is a chance of either gain or loss.)
What are examples of pure risk? (3) - ANSWER>>1. Injured while playing
football
2. Falling at a casino and breaking a hip
3. Jewelry stolen during a home robbery
People with higher loss exposure have the tendency to purchase insurance
more often than those at average risk. This is called - ANSWER>>adverse
selection (the tendency of persons with higher loss exposure to purchase
insurance more often than those at average risk)
An example of risk sharing would be - ANSWER>>Doctors pooling their money
to cover malpractice exposures
The cause of a loss is referred to as a - ANSWER>>peril
Which of the following is considered to be an event or condition that increases
the probability of an insured's loss? - ANSWER>>hazard
, Insurance represents the process of risk - ANSWER>>transference
An individual who removes the risk of losing money in the stock market by
never purchasing stocks is said to be engaging in - ANSWER>>risk avoidance
In an insurance contract, the insurer is the only party legally obligated to
perform. Because of this, an insurance contract is considered -
ANSWER>>unilateral
What are an applicant's statements concerning occupation, hobbies, and
personal health history regarded as? - ANSWER>>representation
The power given to an individual producer that is not specifically addressed in
his/her contract is considered what type of authority? - ANSWER>>implied
In order for a contract to be valid, it must - ANSWER>>contain an offer and
acceptance
According to life insurance contract law, insurable interest exists - ANSWER>>at
the time of application
All of the following are elements of an insurance policy EXCEPT -
ANSWER>>claim forms
All of the following are elements of an insurance policy (3) - ANSWER>>1.
definitions
2. other insurance
3. conditions
Which type of clause describes the following statement: "We have issued the
policy in consideration of the representations in your applications and payment
of the first-term premium". - ANSWER>>consideration clause
