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XCEL Uses of Life Insurance Questions and Answers 2024
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XCEL Uses of Life Insurance
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XCEL Uses of Life InsuranceWhich of these is NOT relevant when determining the amount of personal life insurance
needed? - answer local unemployment rate
In a Key Employee life insurance policy, the third-party owner can be all the following,
EXCEPT: - answer insured
When an individual is planning to protect his family with life insurance, one method of
doing so is called needs analysis. What exactly does needs analysis involve? - answer
establish the needs of the individual and his dependents
In life insurance, the needs approach is used mostly to establish: - answer how much
life insurance a client should apply for
Company Z has a Cross Purchase Buy-Sell Agreement in a place among its three
founding partners. If the agreement is funded with individual life insurance, what would it
require? - answereach partner must own a policy on the other partners
Which of these is NOT a reason for purchasing life insurance on the life of a minor? -
answerif both parents were to die, it would provide death benefits to the child
Which statement regarding third-party ownership of a life insurance policy is true? -
answerit is used extensively in estate-planning as well as business circumstances
Which of these factors does NOT influence an applicant's need for life insurance? -
answerself-maintenance expenses
Which statement regarding a Key Employee Life policy is NOT true? - answerthe
beneficiary is named by the key employee
Which of these is NOT a reason for a business to buy key person life insurance? -
answera pension deficiency if the key employee dies
Two partners own equal shares in a business worth a total of $1,000,000. If they both
commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement,
which of the following is TRUE? - answereach partner owns a $500,000 policy on their
partner's life
A Loss-Purchase Buy and Sell agreement among three partners, funded with individual
life insurance, would require how many policies? - answer6
, What is considered a valid reason for small businesses to insure the lives of its major
shareholders? - answerfund a buy-sell agreement
The premiums paid by an employer for his employee's group life insurance are usually
considered to be: - answertax-deductible to the employer
A Key Employee policy is taken out by Company X on its vice president. Ten years
later, this employee leaves Company X and begins working for Company Y. If this
individual were to die and the policy is still in force and unchanged, where would the
death proceeds be directed? - answerCompany X
Which type of plan allows an employer to give money to an employee for buying a life
insurance policy and also permits the employee to select the beneficiary? - answersplit-
dollar plan
C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on
her life, which of these statements would be true? - answerABC is the policyowner, C is
the insured, and ABC is the beneficiary
An engineering firm that would suffer financially from the death of a project manager
should purchase a: - answerKey Person Life Policy
Which of these is NOT considered to be a cost connected with an individual's death? -
answerbusiness expenses
The federal income tax treatment of employer-provided group Medical Expense
insurance can be accurately described as: - answeremployee's premiums paid by the
employer is tax-deductible to the employer as a business expenditure
K has an Accidental Death and Dismemberment (AD&D) insurance policy where her
husband is beneficiary and her daughter is contingent beneficiary. Under the Common
Disaster clause, if K and her husband are both killed in an automobile accident, where
would the death proceeds be directed? - answerdaughter
S is employed by a large corporation that provides group health coverage for its
employees and their dependents. If S dies, the company must allow his surviving
spouse and dependents to continue their group health coverage for a maximum of how
many months under COBRA regulations? - answer36
If the insured and primary beneficiary are both killed in the same accident and it cannot
be determined who died first, where are the death proceeds to be directed under the
Uniform Simultaneous Death Act? - answerinsured's contingent beneficiary
An insurance company would MOST likely pay benefits under an Accidental Death and
Dismemberment policy for which of the following losses? - answerloss of eyesight due
to an accidental injury
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