XCEL Arizona Life and Health Insurance State Exam
XCEL Arizona Life and Health Insurance
State Exam Study Questions and
Answers 2025
Under a long-term care inflation rider, the benefit levels -Correct Answer ✔periodically
increase without proof of insurability
In order for a health plan to be an "accountable health plan", who has to approve it? -
Correct Answer ✔the director
Medicare Part A coinsurance payments are covered by -Correct Answer ✔Medicare
Supplement Plan A
Employees generally receive workers compensation benefits for -Correct Answer ✔lost
wages and medical expenses due to occupational accidents
What year was the Mental Health Parity and Addiction Equity Act established? -Correct
Answer ✔2008
In what situation would disability income insurance premiums be a deductible expense?
-Correct Answer ✔Corporation paying for group disability income coverage for its
employees
John received a one-time distribution of $50,000 from his modified endowment contract
(MEC). Prior to that, the contract's cash value was $150,000, the contract investment
amount was $100,000, and the death benefit was $500,000. What percentage of the
$50,000 distribution was taxable as ordinary income? -Correct Answer ✔100%
A survivorship life insurance policy usually covers how many lives? -Correct Answer ✔2
Mentally or physically handicapped dependent children MUST be covered under an
individual health insurance policy -Correct Answer ✔until they become self-supportive
ERISA requires that a Summary Plan Description must be provided to a new plan
member within how many days following the new member's eligibility date? -Correct
Answer ✔90 days
A policyowner suffers an injury that renders him incapable of performing one or more
important job duties. Any decrease in income resulting from this injury would make him
eligible for benefits under which provision? -Correct Answer ✔Partial disability
XCEL Arizona Life and Health Insurance State Exam
,XCEL Arizona Life and Health Insurance State Exam
What is the maximum number of employees (earning at least $5,000) that an employer
can have in order to start a SIMPLE retirement plan? -Correct Answer ✔100 employees
Which of the following health plans pay benefits on a pre-paid service basis? -Correct
Answer ✔HMO
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long
as the person has received which of the following benefits for at least 24 months? -
Correct Answer ✔Social Security Disability
Which of the co-annuitants listed below would receive the largest monthly benefit
payments in a joint and 100% survivor annuity? -Correct Answer ✔Ages 71 and 73
Kevin has an existing life insurance policy and assigns it to another insurer for a new
contract. How would this transaction be treated for tax purposes? -Correct Answer ✔As
a Section 1035 exchange
Karen is considering replacing her individual accident and health insurance policy with
another individual policy. She has had issues in the past with her gall bladder that would
be considered a pre-existing condition. How will a pre-existing conditions exclusion
affect Karen's new insurance contract? -Correct Answer ✔May reduce her benefits
Greg had recently been terminated from his job that covered him for group life
insurance. How long does he have to convert his coverage to an individual policy? -
Correct Answer ✔31 days
A policyowner with a terminal illness who sells his life insurance policy to a third party is
called a -Correct Answer ✔viator
What is a juvenile life insurance policy? -Correct Answer ✔A life policy that covers the
life of a minor
ABC Partnership is a business with a limited number of partners. Which disability buy-
sell agreement is best suited for this business? -Correct Answer ✔Cross purchase
agreement
Which of the following involves sharing an uncertain risk with another similar group? -
Correct Answer ✔Transfer
The time limit an individual has to "rollover" funds from an IRA or qualified plan is -
Correct Answer ✔60 days
A life annuity with period certain is characterized as -Correct Answer ✔guaranteeing
benefit payments for a stated minimum number of years
XCEL Arizona Life and Health Insurance State Exam
, XCEL Arizona Life and Health Insurance State Exam
James owns a business and purchased a policy that covers the business expense of
finding a permanent or temporary employee to replace a disabled one. This type of
disability coverage is called -Correct Answer ✔Key employee coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis.
The insurance company has a right to refuse renewal of the policy for -Correct Answer
✔specific reasons stated in the contract
Who is the beneficiary in a life insurance policy? -Correct Answer ✔The stated person
or entity who is designated to receive the death proceeds
The guarantee of insurability option provides a long-term care policyowner the ability to
-Correct Answer ✔buy additional coverage at a later date
Most prepaid dental plans cover -Correct Answer ✔Oral examinations
A policyowner fell behind on the premium payments of a whole life policy and is now in
the grace period. How much will the beneficiary receive if the insured dies during this
grace period and the policy also contains an outstanding policy loan? -Correct Answer
✔Face amount minus the loan balance and past-due premium
In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health
insurance exchange? -Correct Answer ✔Contact the employer if an employee stops
coverage under a plan offered in the exchange
An insurer must keep advertising materials and records for at least how many years? -
Correct Answer ✔3 years
A consumer who has been recently denied insurance, credit, or employment based on
an unfavorable consumer report MUST be advised as such. Which of the following does
this statute originate from? -Correct Answer ✔Fair Credit Reporting Act
The disability income policy most likely to have been issued on a substandard basis is -
Correct Answer ✔Non-cancelable with a health condition exclusion rider
Which of the following situations would a medical exam NOT be required for an
individual health insurance applicant? -Correct Answer ✔Applicant's family members
have a history of cancer
A Medicare Supplement policy is required to do which of the following? -Correct Answer
✔Provide a 30 day free-look period
XCEL Arizona Life and Health Insurance State Exam
XCEL Arizona Life and Health Insurance
State Exam Study Questions and
Answers 2025
Under a long-term care inflation rider, the benefit levels -Correct Answer ✔periodically
increase without proof of insurability
In order for a health plan to be an "accountable health plan", who has to approve it? -
Correct Answer ✔the director
Medicare Part A coinsurance payments are covered by -Correct Answer ✔Medicare
Supplement Plan A
Employees generally receive workers compensation benefits for -Correct Answer ✔lost
wages and medical expenses due to occupational accidents
What year was the Mental Health Parity and Addiction Equity Act established? -Correct
Answer ✔2008
In what situation would disability income insurance premiums be a deductible expense?
-Correct Answer ✔Corporation paying for group disability income coverage for its
employees
John received a one-time distribution of $50,000 from his modified endowment contract
(MEC). Prior to that, the contract's cash value was $150,000, the contract investment
amount was $100,000, and the death benefit was $500,000. What percentage of the
$50,000 distribution was taxable as ordinary income? -Correct Answer ✔100%
A survivorship life insurance policy usually covers how many lives? -Correct Answer ✔2
Mentally or physically handicapped dependent children MUST be covered under an
individual health insurance policy -Correct Answer ✔until they become self-supportive
ERISA requires that a Summary Plan Description must be provided to a new plan
member within how many days following the new member's eligibility date? -Correct
Answer ✔90 days
A policyowner suffers an injury that renders him incapable of performing one or more
important job duties. Any decrease in income resulting from this injury would make him
eligible for benefits under which provision? -Correct Answer ✔Partial disability
XCEL Arizona Life and Health Insurance State Exam
,XCEL Arizona Life and Health Insurance State Exam
What is the maximum number of employees (earning at least $5,000) that an employer
can have in order to start a SIMPLE retirement plan? -Correct Answer ✔100 employees
Which of the following health plans pay benefits on a pre-paid service basis? -Correct
Answer ✔HMO
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long
as the person has received which of the following benefits for at least 24 months? -
Correct Answer ✔Social Security Disability
Which of the co-annuitants listed below would receive the largest monthly benefit
payments in a joint and 100% survivor annuity? -Correct Answer ✔Ages 71 and 73
Kevin has an existing life insurance policy and assigns it to another insurer for a new
contract. How would this transaction be treated for tax purposes? -Correct Answer ✔As
a Section 1035 exchange
Karen is considering replacing her individual accident and health insurance policy with
another individual policy. She has had issues in the past with her gall bladder that would
be considered a pre-existing condition. How will a pre-existing conditions exclusion
affect Karen's new insurance contract? -Correct Answer ✔May reduce her benefits
Greg had recently been terminated from his job that covered him for group life
insurance. How long does he have to convert his coverage to an individual policy? -
Correct Answer ✔31 days
A policyowner with a terminal illness who sells his life insurance policy to a third party is
called a -Correct Answer ✔viator
What is a juvenile life insurance policy? -Correct Answer ✔A life policy that covers the
life of a minor
ABC Partnership is a business with a limited number of partners. Which disability buy-
sell agreement is best suited for this business? -Correct Answer ✔Cross purchase
agreement
Which of the following involves sharing an uncertain risk with another similar group? -
Correct Answer ✔Transfer
The time limit an individual has to "rollover" funds from an IRA or qualified plan is -
Correct Answer ✔60 days
A life annuity with period certain is characterized as -Correct Answer ✔guaranteeing
benefit payments for a stated minimum number of years
XCEL Arizona Life and Health Insurance State Exam
, XCEL Arizona Life and Health Insurance State Exam
James owns a business and purchased a policy that covers the business expense of
finding a permanent or temporary employee to replace a disabled one. This type of
disability coverage is called -Correct Answer ✔Key employee coverage
Kelly purchases a health insurance policy issued on a conditionally renewable basis.
The insurance company has a right to refuse renewal of the policy for -Correct Answer
✔specific reasons stated in the contract
Who is the beneficiary in a life insurance policy? -Correct Answer ✔The stated person
or entity who is designated to receive the death proceeds
The guarantee of insurability option provides a long-term care policyowner the ability to
-Correct Answer ✔buy additional coverage at a later date
Most prepaid dental plans cover -Correct Answer ✔Oral examinations
A policyowner fell behind on the premium payments of a whole life policy and is now in
the grace period. How much will the beneficiary receive if the insured dies during this
grace period and the policy also contains an outstanding policy loan? -Correct Answer
✔Face amount minus the loan balance and past-due premium
In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health
insurance exchange? -Correct Answer ✔Contact the employer if an employee stops
coverage under a plan offered in the exchange
An insurer must keep advertising materials and records for at least how many years? -
Correct Answer ✔3 years
A consumer who has been recently denied insurance, credit, or employment based on
an unfavorable consumer report MUST be advised as such. Which of the following does
this statute originate from? -Correct Answer ✔Fair Credit Reporting Act
The disability income policy most likely to have been issued on a substandard basis is -
Correct Answer ✔Non-cancelable with a health condition exclusion rider
Which of the following situations would a medical exam NOT be required for an
individual health insurance applicant? -Correct Answer ✔Applicant's family members
have a history of cancer
A Medicare Supplement policy is required to do which of the following? -Correct Answer
✔Provide a 30 day free-look period
XCEL Arizona Life and Health Insurance State Exam
