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Xcel Testing Solutions- Life and Health
Insurance- Weighted Exam- 150
Questions
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT - ANSWER- insurance sales calls Charities, political organizations, and surveys are all offered exemptions from The Do Not Call Registry The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called - ANSWER- cancelable The renewability provision in a cancelable policy allows the insurer to cancel or terminate the policy at any time, simply by providing written notification to the insured and refunding any advance premium that has been paid. Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) - ANSWER- Guaranteed insurability rider A guaranteed insurability rider allows for the insured to purchase additional insurance at specific dates or events without evidence of insurability. Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - ANSWER- Noncancellable A noncancellable policy cannot be cancelled nor can its premium rates be increased under any circumstances. In what part of an insurance policy are policy benefits found? - ANSWER- Declarations Essentially, the insurance declaration page is like a quick guide to the insurance policy, providing all of the basic information the policyholder needs to know. What happens if the insurer discovers that the insured's age was accidentally misstated on an application for an individual life insurance policy? - ANSWER- Benefits will be calculated according to how much coverage the premium paid would have purchased for the correct age Benefits will be calculated according to how much coverage the premium paid would have purchased for the correct age. Health insurance will typically cover which of the following perils? - ANSWER- Injury due to accident Accidental injury is typically a covered peril in health insurance.
A viatical settlement contract is an agreement between - ANSWER- A life insurance policyowner and a viatical settlement provider A viatical settlement contract is an agreement between a life insurance policyowner and a viatical settlement provider. Under the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status? - ANSWER- The insurer significantly raises co-insurance charges, deductibles, or co-payment charges According to the Affordable Care Act, grandfathered health plans may lose their grandfathered status if the insurer significantly raises co-insurance charges, deductibles, or co-payment charges Which of these techniques will remove the risk of losing money in the stock market by never purchasing stocks? - ANSWER- Risk avoidance Risk avoidance could eliminate the risk of losing money in the stock market by never investing in stocks. Which of the following nursing home options would BEST suit an individual who needs some nursing care and supervision but NOT full-time care? - ANSWER- Assisted living facilities An assisted living facility would best suit an individual who needs some nursing care and supervision but not full-time care. Under Louisiana law, the agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer is defined as - ANSWER- an appointment The agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer is called an appointment. Which of these would NOT be considered a presumptive disability? - ANSWER- Loss of a leg or arm The loss of ONE arm or a leg is NOT considered a presumptive disability. A producer's license in Louisiana must be renewed every - ANSWER- Two years Producer licenses are issued for periods of 2 years. Bill requires some nursing care and supervision but NOT full-time care. Which of these nursing home options would best serve him? - ANSWER- Assisted living An assisted living facility would best suit an individual who needs some nursing care and supervision but not full-time care. The open enrollment period for Medicare Supplements begins at age - ANSWER- 65 Open enrollment for Medicare Supplements begins at the age the individual becomes eligible for Medicare, which is typically age 65.
How are annuities given favorable tax treatment? - ANSWER- Gains are taxed at distribution Annuity gains are typically tax deferred until distribution. All _____ policies must be guaranteed renewable. - ANSWER- long-term care All long-term care policies must be guaranteed renewable. Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled? - ANSWER- Business overhead expense policy A form of business disability insurance that is designed to cover the actual costs of continuing to do business while an insured business owner is disabled is called a business overhead expense policy. Which of these is NOT a characteristic of the Accelerated Death Benefit option? - ANSWER- The benefit can be offered as a rider at a specific extra cost or may be at no cost Accelerated Death Benefit options are offered with NO increase in premium. What is a condition for which medical advice or treatment was recommended by or received from a provider of health care service within six months preceding the effective date of an individual long-term care policy? - ANSWER- Pre-existing condition In an individual long-term care policy, a pre-existing condition is a condition for which medical advice or treatment was recommended by or received from a provider of health care service within six months preceding the effective date. A producer who is licensed in Louisiana but resident in another state is called a - ANSWER- nonresident producer A producer licensed in Louisiana but a resident in another state is called a nonresident producer. The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage. - ANSWER- 1 Long-term care insurance in any insurance policy is designed to provide coverage for a minimum benefit period of 1 year. To receive an insurance license an applicant must - ANSWER- Apply for the license after passing the appropriate examination An applicant must apply for the license after passing the appropriate examination in order to receive an insurance license. A cease and desist order issued against a producer - ANSWER- Prohibits a specific practice listed in the order A cease and desist order issued against a producer prohibits a specific practice listed in the order.
How are survivorship life insurance policies helpful in estate planning? - ANSWER- Provide funds to help pay taxes Survivorship life insurance policies are useful in estate planning because they can provide money to pay taxes on assets. When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)? - ANSWER- When contribution or participation rules have been violated According to HIPAA, a group health policy renewal can be denied when participation or contribution rules have been violated. Credit Accident and Health plans are designed to - ANSWER- help pay off existing loans during periods of disability Credit Accident and Health plans are designed to help pay off existing loans during periods of disability. What amount will be paid under a policy where the insured misstated his/her age? - ANSWER- An amount the premium would have purchased at the correct age The misstatement of age provision allows the insurer to adjust the benefit payable if the age of the insured was misstated when application for the policy was made. Of the following dividend options, which of these is taxable? - ANSWER- Accumulation at interest The accumulation at interest is a taxable dividend option. A health insurance policy will typically cover - ANSWER- preventative health services Preventative health services are normally covered under a health insurance policy. A guaranteed issue insurance policy has no - ANSWER- medical underwriting A guaranteed issue policy refers to an insurance policy with no medical underwriting. An insurer, in general business practice, fails to promptly provide a reasonable explanation for the denial of a claim. This is considered to be - ANSWER- an unfair claim settlement practice Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be an unfair claim settlement practice. Which of the following is a requirement for ANY change in an insurance application? - ANSWER- Change must be initialed by the applicant Any changes in an insurance application MUST be initialed by the applicant. A Medicare supplement plan can be canceled by the insurer - ANSWER- for nonpayment of premiums An insurer can cancel a Medicare supplement plan after nonpayment of premiums.
An insurer need not pay interest on benefits if the proceeds of the policy are paid within 20 days after the date of death of the insured. Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have? - ANSWER- Calendar-year deductible Which of the following is NOT a common exclusion for a medical expense policy? - ANSWER- Physical Therapy All of the following actions are considered rebating EXCEPT - ANSWER- sharing commissions with other licensed and appointed agents Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n) - ANSWER- deductible A deductible is a stated initial dollar amount that the individual insured is required to pay before insurance benefits are paid. Life insurance policies can refuse to pay benefits for death from all of the following causes of death EXCEPT - ANSWER- heart attack A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT - ANSWER- fare-paying passenger A policy may contain provisions excluding or restricting coverage as specified in the event of death under all of these situations EXCEPT a fare-paying passenger. What types of life insurance are normally used for key employee indemnification? - ANSWER- term, whole, and universal life insurance The types of life insurance generally used to cover key employee indemnification are term, whole, and universal life insurance. An insurance producer is BEST defined as - ANSWER- a person who has a contract with an insurance company to represent it "Insurance producer" or "producer" is a person required to be licensed pursuant to the laws of this state to sell, solicit, or negotiate insurance. Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes? - ANSWER- Taxable income Disability insurance benefits from a group policy paid for by an employer is considered taxable income. How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? - ANSWER- With a usual, customary, and reasonable fee
In order to qualify for a company convention, an insurance producer agrees to pay the first quarterly premium for the applicant for new insurance. This is called a - ANSWER- rebate This situation is considered a rebate, which is illegal. The Louisiana Health Plan is best described as - ANSWER- A health insurance plan for individuals who have been denied coverage elsewhere The Louisiana Health Plan is best described as a health insurance plan for individuals who have been denied coverage elsewhere. The Commissioner may suspend a producer's license for all of the following reasons EXCEPT - ANSWER- Sharing commissions with other licensed producers Sharing commissions with other licensed producers is allowed. A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability? - ANSWER- Disability income rider The rider which pays a life insurance policyowner a monthly amount in the event of total and permanent disability is called a disability income rider. The waiting period for a disability insurance policy - ANSWER- excludes payments for a short-term illness or injury With regard to disability insurance, the waiting (elimination) period is to exclude payments for a short-term illness or injury. Which of the following is considered to be an alternative to a life settlement? - ANSWER- Accelerated death benefit rider An alternative to a life settlement is an accelerated death benefit rider. A licensed producer who changes a residential or business address must notify the Commissioner within how many days? - ANSWER- 30 A licensed producer who changes a residential or business address must notify the Commissioner within 30 days. If the annuitant dies before the annuity start date, - ANSWER- the premiums paid plus interest earned will be given to the beneficiary If the annuitant dies before the annuity start date, the beneficiary receives the premiums paid plus interest earned. A limited payment whole life policy provides - ANSWER- lifetime protection Premiums on limited payment whole life insurance are paid for a limited number of years, but the benefits last a lifetime. The life insurance and annuity replacement regulation defines replacement as - ANSWER- exchanging an existing policy for a new policy
Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - ANSWER- Payor benefit A payor benefit will waive the premium on a juvenile life insurance policy if the parent paying the premium dies. In small group accident and health plans, a late enrollee is an individual who - ANSWER- elects coverage after the initial eligibility period In small group accident and health plans, a late enrollee is an individual who elects coverage after the initial eligibility period. The late enrollee may be required to provide evidence of insurability. Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? - ANSWER- May 30 The "effective date" is the health insurance coverage start date. Which situation would qualify an individual for receiving benefits from a qualified long- term care policy? - ANSWER- Becoming cognitively impaired (mentally ill) A qualified long-term care policy must pay benefits when an individual is cognitively impaired. The limited period of time given to all members to sign up for a group health plan is called the - ANSWER- enrollment period The enrollment period is a limited period of time during which all members may sign up for a group plan. When replacing individual health insurance, a producer should compare existing benefits with the proposed new policy to determine if: - ANSWER- Existing benefits would be maintained under the new plan When replacing individual health insurance, a producer should compare existing benefits with the proposed new policy to determine if existing benefits would be maintained under the new plan. In a Long-Term Care policy, activities of daily living (ADL's) can be each of the following EXCEPT - ANSWER- Talking Talking is not considered an activity of daily living (ADL) for Long-Term Care insurance purposes. Activities of daily living (ADLs) include bathing, dressing, eating, mobility, transferring, toileting, and continence. A Medicare Supplement Policy is - ANSWER- designed to fill in the gaps of Part A and Part B Medicare A Medicare Supplement policy is designed to fill in the gaps of Part A and Part B Medicare.
In order to act as an insurance producer, a business entity must do which of the following? - ANSWER- Obtain an insurance producer license A business entity must obtain an insurance producer license in order to act as an insurance producer. Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500? - ANSWER- $ In this situation, the insured will pay $500 deductible plus $200 coinsurance = $700. Which of these statements concerning Traditional IRAs is CORRECT? - ANSWER- Earnings are taxable when withdrawn Traditional IRA earnings are taxable when withdrawn. Typically, Long-Term Disability benefits are coordinated with which benefit plan? - ANSWER- Social Security In most cases, Long-Term Disability benefits are coordinated with Social Security benefits. A producer is required to give an applicant for long-term care - ANSWER- An outline of coverage An outline of coverage must be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation. A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing - ANSWER- benefit limits To prevent an insured from earning a higher income than if he or she were working, disability income policies utilize benefit limits. All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT - ANSWER- Reduction of Premium All of these are nonforfeiture options EXCEPT Reduction of Premium. A waiver of premium rider allows an insured to waive premium payments if the insured is - ANSWER- completely and permanently disabled Under a waiver of premium rider, the company waives the right to receive a premium if the insured individual is permanently and completely disabled. Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? - ANSWER- Life annuity certain A life annuity certain provides a guaranteed minimum number of benefit payments, whether the annuitant live or dies. With a scheduled dental policy, how are covered expenses paid? - ANSWER- Benefits are limited to a specific maximum dollar amount per procedure Benefits will be limited to a specific maximum dollar amount per procedure in a scheduled dental policy.
paid from the disability plan? - ANSWER- Taxes must be paid on 75% of the benefits received In this situation, the insured must pay taxes on 75% of the benefits received. Continued coverage under COBRA would be provided to a(n) - ANSWER- terminated employee A terminated employee is eligible to continue health coverage under COBRA. Which policy feature makes a universal life policy different from a whole life policy? - ANSWER- A flexible premium schedule The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule. A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n) - ANSWER- partial surrender A partial surrender allows the policyowner to withdraw the policy's cash value interest free. An insurance producer is one who may do all of the following EXCEPT - ANSWER- Underwrite insurance contracts An insurance producer is one who may do all of the following EXCEPT underwrite insurance contracts. Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this? - ANSWER- Universal Life policy This is an example of a Universal Life policy. Level premium permanent insurance accumulates a reserve that will eventually - ANSWER- equal the face amount of the policy Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy. A medical provider that accepts Medicare Assignment must - ANSWER- accept payment based upon a defined Medicare schedule as payment in full A medical provider that accepts Medicare Assignment must accept payment based upon a defined Medicare schedule as payment in full. What happens when an insurance policy is backdated? - ANSWER- The policy's effective date is earlier than the present Backdating on an insurance policy is the practice of making the policy effective on an earlier date than the present. Which type of multiple protection policy pays on the death of the last person? - ANSWER- Survivorship life policy A survivorship life policy pays on the death of the last person.
During the accumulation period, who can surrender an annuity? - ANSWER- Policyowner The policyowner is the only one who can surrender an annuity during the accumulation period. Which type of policy combines the flexibility of a universal life policy with investment choices? - ANSWER- Variable universal life policy When the structure and flexibility of a universal life policy are combined with investment choices, the result is a variable universal life policy. A nonresident of Louisiana who has satisfied the licensing requirements for a line of insurance in the licensee's state and who wishes to sell that line of insurance in Louisiana, must meet all of the following requirements EXCEPT: - ANSWER- Take the appropriate Louisiana licensing examination A nonresident licensee from another state is not required to take a licensing examination if they are already in good standing with their state of residence. An insurer's license to do business in Louisiana is called - ANSWER- a certificate of authority An insurer's license to do business in Louisiana is called a certificate of authority. When a company is licensed by the Department of Insurance to do business in this state, it becomes - ANSWER- An authorized company When a company is licensed by the Department of Insurance to do business in this state, it becomes an authorized company. In Louisiana, a long-term care policy which lapses may be reinstated within five months if - ANSWER- The covered individual was mentally incapacitated In Louisiana, a long-term care policy which lapses may be reinstated within five months if the covered individual was mentally incapacitated. Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires, - ANSWER- the protection ends When the term insurance expires in an extended term option, there is no more protection. A health insurance policy covers the insured, the insured's spouse, and their child. If additional children are born to the family, the health insurance policy must cover the children - ANSWER- From the date of birth In this situation, the health insurance policy must cover the children from the date of birth. A securities license is required for a life insurance producer to sell - ANSWER- variable life insurance
If an annuitant dies before the annuity start date, the beneficiary receives the premiums paid plus interest earned. The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? - ANSWER- Long Term Care Insurance premiums Tax-qualified long-term care premiums are considered a deductible medical expense if the taxpayer's medical expenses exceed 7.5% of their adjusted gross income. Which of the following is considered to be controlled business? - ANSWER- Selling most of the insurance policies to family members Selling most of the insurance policies to family members would be considered controlled business. A life insurance policy becomes incontestable after it has been in force for - ANSWER- 2 years The contestable period in Louisiana for life insurance policies is 2 years. An annuitant is guaranteed to NOT outlive their benefits with a(n) - ANSWER- Guaranteed lifetime withdrawal benefit A guaranteed lifetime withdrawal benefit (GLWB) is a rider on a variable annuity that allows minimum withdrawals from the invested amount without having to annuitize the investment. This rider guarantees that a certain percentage (often based on age) of the amount invested can be withdrawn each year for as long as the contract holder lives. What is an insurer required to do when faced with an error made under the Misstatement of Age provision? - ANSWER- Pay age-corrected benefits Under the Misstatement of Age Provision, when done in error, an insurer must pay age- corrected benefits. Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death? - ANSWER- Results The "results clause" states the insurer is excused from paying the amount only if the death is a result of war. An insurer operating in the U.S. but headquartered outside the U.S. is - ANSWER- an alien insurer An insurance company headquartered in another country is considered an alien insurer in the United States. If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit? - ANSWER- $ In this situation, the taxable monthly income is $500 because half of the premium was paid for by the employer.
Which statement is true regarding Louisiana's continuing education requirements for licensed producers? - ANSWER- A producer must meet specified course requirements within a two-year period Producers must complete 24 hours of continuing education per line of authority every two years in order to renew their licenses. Each policy of life insurance shall contain a provision that a grace period shall be allowed within which the payment of any premium after the first may be made. The standard grace period shall be - ANSWER- 30 days The required grace period for life insurance policies in Louisiana is 30 days. Which situation accurately describes a reduced paid-up nonforfeiture option? - ANSWER- Policy has a decreased face amount With a reduced paid-up nonforfeiture option, the policy will have a decreased face amount. Which of these is NOT considered to be a risk factor in life insurance underwriting? - ANSWER- Number of children All of these are considered risk factors in life underwriting criteria EXCEPT number of children. The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) - ANSWER- accident A life insurance policy's double indemnity provision would apply when the policyowner's death occurs due to an accident. All of the following are considered to be fraud EXCEPT - ANSWER- collecting a charge for insurance that is less than the charge applicable to that insurance All of these are considered fraudulent acts EXCEPT collecting a charge for insurance that is less than the charge applicable to that insurance. Which of the following is NOT part of an insurance contract? - ANSWER- Certificate of Authority The Certificate of Authority allows an insurer to conduct business in a state. It is not part of an insurance contract. The time limit for filing claim disputes is addressed in which provision of an accident and health policy? - ANSWER- Legal actions The Legal actions provision of an accident and health policy dictates the time limit for filing claim disputes.
