WEBCE Practice Exam With Complete Solutions 2024/2025

WEBCE Practice Exam With Complete Solutions 2024/2025 A policyowner can access the cash value of many life insurance policies through withdrawals, loans or policy surrender. Which of the following terms describes the ability to easily convert life insurance into cash? - answerLiquidity. Life insurance policy proceeds are protected from the claims of creditors due to the policy's: - answerSpendthrift clause. Which of the following is an insurable risk? - answerThe possibility of becoming disabled and unable to earn an income. When pricing health insurance policies, the morbidity rates indicate: - answerThe average number of persons in a large group who are expected to become disables because of accident or sickness. Those eligible for family coverage under a group medical expense plan would typically be which of the following? - answerPrimary insured, spouse, their son, and the spouse's children from a previous marriage. Which of the following statements is correct about the HMO claims process? - answerMembers do not need to submit claim forms for services provided within the network. Which statement correctly describes the tax treatment of unreimbursed medical expenses? - answerThey may be deducted from taxable income if they exceed a certain percentage of AGI. All of the following statements about multiple employer trusts are correct EXCEPT: - answerThe individual employers each own separate group life policies. The use of permanent life insurance policy as security for obtaining a bank loan is done through a(n): - answerCollateral assignment. Which of the following statements about variable life insurance is correct? - answerThe cash value is not guaranteed with variable life. Which of the federal law group health plans and protects their enrollees? - answerERISA. Which statement is correct about the tax treatment of distributions from endowment policies? - answerThey are subject to federal income taxation. When choosing a health care provider from a PPO and managing out-of-pocket expenses, the insured can: - answerUse a network provider for the lowest cost, or use a non-network provider for more flexibility. Which disability would most likely qualify for a full benefit under the presumption of disability provision? - answerLoss of eyesight. Besides being an admitted insurer, an insurer that wants to offer a small group health insurance in Texas must be certified by the Texas Department of Insurance as an: - answerSmall employer carrier. All of the following reasons that a business might buy life insurance represent a valid insurable interest, EXCEPT: - answerTo provide insurance coverage for a large-volume customers. Which provision in a health insurance policy imposes a waiting period on every claim before benefits begin? - answerElimination period. Juan just purchased an individual long-term care insurance policy from Acme Insurers. The first page of the policy states that it is guaranteed renewable, which means that - answerAcme must allow Juan to renew the policy every year, but it may increase premiums under certain conditions. What purpose does a mandatory minimum group size serve in underwriting group health insurance? - answerIt spreads the risk and the administrative costs among numerous participants. Which payment arrangement do medical expense indemnity policies typically use? - answerFee-for-service. A person who refuses to engage in risky activities like rock climbing for fear of injury or death is demonstrating which risk management technique? - answerRisk avoidance. All of the following are standard types of term life insurance EXCEPT: - answerVariable term insurance. An insured is injured and files a claim under his disability income insurance policy. When does the elimination period begin? - answerOn the date of injury. What is the main appeal of joint life insurance? - answerLower cost than two separate policies. Janson Automotive is a small family-owned business with 20 employees. If it offers a small employer health benefit plan, which of the following employees will be eligible for coverage? - answerDora, who works 35 hours a week as a full-time office manager. Which statement about disability buy-out insurance policies is correct? - answerThey may be used with either a cross-purchase buy-sell agreement or an entity purchase buy-sell agreement. What will result if an insured decides to stop paying premiums for his or her insurance policy? - answerThe insurance company is released from its promise to pay benefits and the contract expires. Under which nonforfeiture option does permanent life insurance continue in force with no further need for premiums? - answerReduced paid-up option. When determining eligibility for Medicaid, states do NOT consider: - answerHousehold size. Martha was covered by a $50,000 group life insurance policy through her employer. After losing her job and deciding to take an early retirement, she talked to her agent about converting the group policy to individual coverage. Her agent informs her that: Martha can be issued a conversion policy with no more than $50,000 in coverage. To convert to an individual policy, Martha must first provide evidence of insurability. She can convert the policy to a term policy. The premium for the individual policy will be the same as the premium paid for group coverage. - answerMartha can be issued a conversion policy with no more than $50,000 in coverage. When does a fixed deferred annuity contract provide a death benefit? - answerOnly if the contract owner or annuitant dies during the accumulation period. Reimbursement health insurance policies, in contrast to valued health insurance policies, pay benefits based on: - answerThe cost of the medical care received. What is the purpose of the fiduciary in a group health insurance plan? - answerTo administer the plan in a financially responsible manner. A basic physician expense policy typically specifies: - answerThe maximum benefit amount per visit, and the maximum number of visits per injury or illness. An insured's estate can be a beneficiary. However, what is the main disadvantage of that arrangement? - answerIt places the policy benefits into the estate where they are subject to creditors and estate taxes. An insured's health insurance plan pays benefits based on the actual amount of the loss. The insured is repaid for some or all of the medical expenses the policy covers. What type of health insurance plan does the insured have? - answerIndemnity plan. Cal bought a $100,000 universal life policy ten years ago. He has paid $8,000 in premiums into the policy. He now decides to surrender the policy for its full $15,000 cash value. What amount is taxable? - answer$7,000