XCEL Chapter 6

A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the? A. estate of the insured only B. estate of the deceased beneficiaries only C. named contingent beneficiaries only D. named living primary beneficiaries

Mortality is calculated by using a large risk pool of? A. hobbies and time B. people and time C. family history and geographical area D. insurance companies and agents

A policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation? A. Contingent beneficiary B. Tertiary beneficiary C. Revocable beneficiary D. Irrevocable beneficiary

Over the course of a year, which premium payment mode is most expensive? A. Monthly B. Quarterly C. Semi-Annually D. Annually

Naming a contingent beneficiary as "all surviving children" is described by which term? A. Contingent designation B. Primary designation C. Class designation D. Tertiary designation

How is the cost of a policy affected when a policyowner pays premiums more frequently? A. Not affected B. Increases C. Decreases D. Depends on the type of coverage

Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause? A. protection clause B. creditor clause C. spendthrift trust clause D. beneficiary trust clause

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? A. interest only B. dividends only C. extended interest D. fixed period

Which of these premium payment frequencies is not typically available to a policyowner? A. Bi-weekly B. Monthly C. Quarterly D. Semi-annual

Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? A. Section 1040 exchange B. Section 1035 exchange C. Nonforfeiture Option D. Spendthrift Option

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? A. interest only B. dividends only C. extended interest D. fixed period

A beneficiary change can occur? A. only upon the request of the revocable beneficiary B. only on specified dates within the policy C. normally at any time during the policy term D. at no time

If the beneficiary dies from the same accident as the insured individual, the insurer will proceed as if? A. the insured outlived the beneficiary B. the beneficiary outlived the insured C. both the insured and beneficiary died at the same time D. the estate was listed as beneficiary

An example of naming a beneficiary by class would be? A. "To the children born of my union with Ned Jackson: David Jackson, Jennifer Jackson, and Scott Jackson" B. "To the child born of my union with Ned Jackson: Scott Jackson" C. "To the children born of my union with Ned Jackson" D. "To Ned Jackson"

Which of these is considered a major tax advantage of life insurance? A. Tax credits are available for life insurance premiums paid B. Annual earnings are tax free C. Premiums are tax deductible by an employee if paid for by an employer D. Income tax is typically not owed on proceeds paid directly to a beneficiary

Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later. Which policy provision will protect the rights of the contingent beneficiary to receive the policy benefits? A. Nonforfeiture clause B. Common disaster clause C. Spendthrift clause D. Accident indemnity clause

What happens to the total amount of premium paid for an insurance policy when the payment frequency increases? A. No difference in cost B. Decreases C. Increases D. Depends on the type of coverage

Which type of beneficiary should be named if the insured wants to give explicit directions on how the policy proceeds should be paid? A. Individual B. Group C. Class D. Estate

Which of these is affected by the frequency of an insurance policy's premium payments? A. Settlement options B. Cash value C. Death benefit D. Cost

Elizabeth is the beneficiary of a life insurance policy. She is receiving the death benefit in payments of $10,000 per month until the principal and interest has been paid out. Which option was chosen? A. Fixed period B. Fixed amount C. Life income D. Interest only

A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed? A. A flat tax of 10% is owed on all proceeds B. Federal income tax is owed if proceeds exceed $250,000 C. No federal income tax is owed on life insurance proceeds D. Tax liability owed depends on the type of life insurance policy

What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured? A. Policy Dividend B. Specified amount of money C. Policy's cash value D. Funeral expense fund

Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called? A. estate funding B. capital withholding C. capital gains D. estate conservation