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XCEL Chapter 4 Questions and Answers
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Exam of 2 pages for the course Xcel solution at Xcel solution (XCEL Chapter 4)
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XCEL Chapter 4John and Mary have a handicapped child that is financially dependent upon them. The
death of one of the parents would not be financially disastrous, however the death of
both likely would be. Which policy would be best suited for them? - answer Second-to-
die policy
An insurance policy written after 1988 that fails to pass the seven-pay test is known as -
answer a modified endowment contract
What is the proper order of initial life insurance premiums, from lowest to highest? -
answer Modified premium, ordinary life, single premium
In a renewable term life insurance policy, the contract will usually - answer require a
higher premium payable at each renewal
Which of the following is NOT a true description of non-medical life insurance? - answer
Applicants are not required to answer medical questions on the application
A life insurance policy's limit of liability would be - answer a policy's face amount
Which of the following is NOT true regarding a family policy that covers children? -
answer Conversion of child's coverage to permanent insurance requires evidence of
insurability
A life insurance policy where the insured can choose where the cash value can be
invested is called - answer variable life
A life insurance policy that pays the face amount if the insured survives to a specified
period of time is called - answer endowment insurance
Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for
taking a loan against this policy prior to age 59 1/2? - answer10%
In a modified endowment contract, the penalty tax imposed on withdrawals is -
answer10%
Which of the following types of life insurance combines a savings element along with a
flexible premium option? - answer Universal life
Which of the following is a life insurance policy that does NOT require a physical exam?
- answer on-medical
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