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XCEL STATE SIMULATOR EXAM (LIFE & HEALTH) 2026/2027
QUESTIONS WITH DETAILED VERIFIED ANSWERS / EXAM
QUESTIONS AND VERIFIED ANSWERS |ALREADY GRADED
A+|
Which of the following describes the increase in the probability of
a loss due to an insureds dishonest tendencies
A) morale hazard
B) physical hazard
C) moral hazard
D) speculative hazard - ANSWER-Moral hazard
Which of the following BEST describes how a Preferred Provider
Organization (PPO) is less restrictive than a Health Maintenance
Organization (HMO)?
A) typically, not subject to deductibles
B) not regulated by the federal government
C) more benefits available
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D) more physicians to choose from - ANSWER-More physicians
to choose from
Which of the following is NOT considered a definition of risk?
A) The potential for loss
B) The cause of a loss
C) Exposure to danger
D) Uncertainty - ANSWER-The cause of a loss
A characteristic of Preferred Provider Organizations (PPOs) would
be:
A) discounted fees for the patient
B) not allowed to see out of network physicians
C) physicians are paid on a capitation basis
D) a primary care position is required - ANSWER-Discounted fees
for the patient
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Which of the following is considered to be a situation that has the
potential for loss?
A. Law of large numbers
B. Adverse Selection
C. Loss exposure
D. Risk transfer - ANSWER-Loss Exposure
Which of the following BEST describes a Hospital Indemnity
policy?
A) coverage that reimbursed an insured for surgeon expenses
B) coverage that pays a stated amount per day of a covered
hospitalization
C) coverage that replaces lost income due to hospitalization
D) coverage that pats for hospital room and board - ANSWER-
Coverage that pays a stated amount per day of a covered
hospitalization
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Which of the following is NOT an element of an insurable risk?
A) loss must be due to chance
B) loss frequency must be predictable
C) loss must be measurable
D) loss must be catastrophic - ANSWER-The loss must be
catastrophic.
Which of the following situations does a critical illness plan cover
A) asthma
B) leukemia
C) alcohol rehabilitation
D) severe car accident - ANSWER-Leukemia
What does ESOP stand for?
A) Employee Stock Ownership Plan
XCEL STATE SIMULATOR EXAM (LIFE & HEALTH) 2026/2027
QUESTIONS WITH DETAILED VERIFIED ANSWERS / EXAM
QUESTIONS AND VERIFIED ANSWERS |ALREADY GRADED
A+|
Which of the following describes the increase in the probability of
a loss due to an insureds dishonest tendencies
A) morale hazard
B) physical hazard
C) moral hazard
D) speculative hazard - ANSWER-Moral hazard
Which of the following BEST describes how a Preferred Provider
Organization (PPO) is less restrictive than a Health Maintenance
Organization (HMO)?
A) typically, not subject to deductibles
B) not regulated by the federal government
C) more benefits available
, Page |2
D) more physicians to choose from - ANSWER-More physicians
to choose from
Which of the following is NOT considered a definition of risk?
A) The potential for loss
B) The cause of a loss
C) Exposure to danger
D) Uncertainty - ANSWER-The cause of a loss
A characteristic of Preferred Provider Organizations (PPOs) would
be:
A) discounted fees for the patient
B) not allowed to see out of network physicians
C) physicians are paid on a capitation basis
D) a primary care position is required - ANSWER-Discounted fees
for the patient
, Page |3
Which of the following is considered to be a situation that has the
potential for loss?
A. Law of large numbers
B. Adverse Selection
C. Loss exposure
D. Risk transfer - ANSWER-Loss Exposure
Which of the following BEST describes a Hospital Indemnity
policy?
A) coverage that reimbursed an insured for surgeon expenses
B) coverage that pays a stated amount per day of a covered
hospitalization
C) coverage that replaces lost income due to hospitalization
D) coverage that pats for hospital room and board - ANSWER-
Coverage that pays a stated amount per day of a covered
hospitalization
, Page |4
Which of the following is NOT an element of an insurable risk?
A) loss must be due to chance
B) loss frequency must be predictable
C) loss must be measurable
D) loss must be catastrophic - ANSWER-The loss must be
catastrophic.
Which of the following situations does a critical illness plan cover
A) asthma
B) leukemia
C) alcohol rehabilitation
D) severe car accident - ANSWER-Leukemia
What does ESOP stand for?
A) Employee Stock Ownership Plan
