Xcel Final Exam Questions and Answers With complete Solutions Latest 2024 (Graded A+)

Xcel Final Exam Questions and Answers With complete Solutions Latest 2024 (Graded A+) The focus of major medical insurance is providing coverage for Ans medical and hospitalization expenses An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for? Ans $200 because this policy has a zero deductible, the insures is only responsible for the 20% coinsurance on this claim, or $200 An insured has a stop-loss limit of $5,000 and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured pay? Ans $5,000 Which type of plan would be the most appropriate for an individual on Medicare and concerned that Medicare will NOT pay for charges exceeding the approved amount? Ans Medicare supplement Plan F When can a group health policy renewal be denied according to the Health Insurance Portability and Accountability Act (HIPAA)? Ans when contribution or participation rules have been violated What does the word "level: in Level Term describe? Ans the face amount Xcel Final Exam Comprehensive of Life and Health Insurance all Possible Questions and Answers With complete Solution Graded A+ A non-contributory health insurance plan helps the insurer avoid Ans adverse selection because all eligible employees are usually covered, non-contributory plans are desirable from an underwriting standpoint because adverse selection is minimized. To qualify for a resident producer license in the state of Michigan, an individual Ans must complete the required pre-licensing education within 12 months of license application Under an expense-incurred individual health policy, what is the MAXIMUM length of time after issuance of the policy that an insurer can exclude coverage for a pre-existing condition? Ans 12 months pre-existing conditions may be excluded for a maximum of 12 months from the date of enrollment. An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a Ans benefit schedule benefits schedule set predetermined limits or maximums on how much money and insured can be reimbursed for a covered loss. Who is the individual paid on a fee-for-service basis? Ans Provider Which of the following is NOT an illegal inducement? Ans Giving the insured an article of merchandise printed with the producer's name costing $5 $5 or less of tokens or merchandise to applicants is allowed. Making a statement that is false or maliciously critical of the financial condition of an insurer is known as Ans defamation Which of the following is NOT a required provision in an accident and health insurance policy? Ans change of occupation the change of occupation provision is considered an OPTIONAL provision Which of these statements about Medicaid is CORRECT? Ans Funded by federal, sate, and local taxes Medicaid is funded by federal, state, and local taxes but is administered by each state. All of these are considered key factors in underwriting life insurance EXCEPT Ans Marital Status Correct: tobacco use, health history, age The time limit for filing claim disputes is addressed in which provision of an accident and health policy? Ans legal actions All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT Ans Health reimbursement Arrangement plan employers contribute to health reimbursement Arrangement planz (HRA's), not employees. Which of the following gifts from a producer would NOT be considered rebating? Ans $5 pen A producer quoting life insurance may give an applicant an article of merchandise having an invoice value of $5.00 or less. Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. Ans 20 Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability? Ans own occupation the "own occupation" definition of total disability requires that the insured be unable to perform the insured's current occupation as a result of an accident or sickness. Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? Ans Human life value approach The human life value approach predicts an individual's future earning potential and determines how much of that amount would be devoted to dependents. Index whole life insurance contains a securities component that acts as a(n) Ans hedge against inflation Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose? Ans Guaranteed lifetime withdrawal benefit The guaranteed lifetime withdrawal benefit normally requires a fee, but it ensures that the income benefit will be paid for life without actually annuitizing the contract. Which of these factors would an insurer consider when determining whether to accept a group life plan? Ans average age and insurer would consider the average age when determining whether to accept a group Life Plan. This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes Ans the entire insurance contract between the parties The monthly benefit for an individual disability income policy is usually limited to a percentage of the insured's income in order to avoid Ans over insurance When an insurance licensee changes his or her address under the Michigan Insurance Code, who MUST be notified? Ans the commissioner of the Department of Insurance and financial services (DIFS) Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this? Ans Child term rider A child term rider is a level term insurance that can be added to an existing policy. The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage. Ans 1 How many employees must an employer have for a terminated employee to be eligible for COBRA? Ans 20 Which of the following policies does NOT build cash value? Ans Term CORRECT: straight life, endowment, variable life Which type of annuity stops all payments upon the death of the annuitant? Ans Life annuity The type of annuity in which all payments cease upon the death of an annuitant is referred to as a life annuity. Under the subrogation clause, legal action can be taken by the insurer against the Ans responsible third party Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered Ans Noncancellable A noncancellable policy cannot be cancelled nor can its premium rates be increased under any circumstances. Coordination of Benefits regulation applies to all of the following plans EXCEPT Ans preferred provider organization plan CORRECT: group vision plan, self-funded group health plan, group health plan A spouse and child can be added to the primary insured's coverage as what kind of rider? Ans Family term Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay? Ans $900 In this situation, the group insurance carrier will pay 90% of the covered loss after the deductible has been applied. In order to save on premiums, a Life Insurance policy can legally be backdated up to Ans 6 months Statements made by an insurance applicant on an application are considered to be Ans representations To receive proceeds from a death benefit, a minor Ans must have an appointed guardian In the interest of protecting the assets of a minor, state law requires that a guardian be appointed to administer the proceeds payable to the minor child. Which of the following services MUST be provided by HMO plans? Ans Home health care Home health services is an HMO mandatory benefit in Michigan. The unfair trade practice of replacing an insurance policy from one insurer to another based on misrepresentation is called Ans twisting In determining whether a pre-existing condition applies, the enrollee CANNOT have more than how many days' gap in health insurance? Ans 63 A business will typically use which type of life insurance to cover their employees? Ans Group policy Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences? Ans 60 Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? Ans $4,000 In this situation, Ron may increase the face value of his policy by $4,000. $100,000 X .04 = $4,000. When an accident and health policy requires payment of an additional premium to provide coverage for a newborn, how many days after the birth is the first payment due? Ans 31 Peter has a policy where 80% to 90% of the premium is invested in traditional fixed income securities and the remainder of the premium is invested in contracts tied to a stipulated stock index. What kind of policy is this? Ans Equity index whole life A life insurance policy that contains a guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate is called Ans universal life What is issued to each employee of an employer health plan? Ans Certificate 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? Ans Calendar-year deductible A calendar-year deductible is paid before any benefits are paid in a calendar year. An insurer would be committing Unfair Discrimination if coverage was denied based upon Ans marital status A licensee who is required to take continuing education MUST include how many ethics coursework hours? Ans 3 A licensee is required to take 24 hours of continuing education every two years. Of the 24 hours, 3 must be in ethics 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) Ans Guaranteed insurability rider When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? Ans the family's Financial objectives if the income earner were to die or become disabled 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, Ans the protection ends When the insured gives birth, coverage for eligible newly born children consists of coverage of injury or sickness including Ans birth abnormalities Which of these is NOT considered to be a purpose of an annuity? Ans Annuities are intended to create an estate CORRECT: annuities are indented to liquidate an estate, annuities are intended for the tax-free growth of principal, and annuities are intended to distribute accumulate principal What is the purpose for having an accelerated death benefit on a life insurance policy? Ans it allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Ans can be converted to permanent coverage without evidence of insurability Life insurance policies will normally pay for losses arising from Ans commercial aviation Medical Expense Insurance would cover Ans an injury occurring at the insured's residence A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n) Ans optional renewability clause An optional renewability clause allows an insurer the unrestricted right to terminate coverage at any anniversary or at any premium due date. Which of these is NOT considered to be a risk factor in life insurance underwriting? Ans Number of children CORRECT: health history, hobbies, occupation Which of these is NOT a characteristic of the Accelerated Death Benefit option? Ans the benefit can be offered as a writer and a specific extra cost or may be at no cost CORRECT: the face amount and policy premium are not affected by the payment, before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness, there may be a dollar amount on the maximum benefit The branch of dentistry which deals with the replacement of missing parts is called Ans Prosthodontics Prosthodontics is the branch of dentistry concerned with the design, manufacture, and fitting of artificial replacements for teeth and other parts of the mouth. Under long-term care insurance, which of the following MUST an insurer offer to each policyowner at the time of purchase? Ans An inflation protection feature