Xcel Final Exam Questions with
Correct Answers
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? -
ANSWER-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. - ANSWER-1
How many employees must an employer have for a terminated employee to be
eligible for COBRA? - ANSWER-20
Which of the following policies does NOT build cash value? - ANSWER-Term
CORRECT: straight life, endowment, variable life
Which type of annuity stops all payments upon the death of the annuitant? -
ANSWER-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 -
ANSWER-responsible third party
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.
Coordination of Benefits regulation applies to all of the following plans EXCEPT -
ANSWER-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? - ANSWER-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? - ANSWER-$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
- ANSWER-6 months
Statements made by an insurance applicant on an application are considered to be -
ANSWER-representations
To receive proceeds from a death benefit, a minor - ANSWER-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? - ANSWER-
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 - ANSWER-twisting
In determining whether a pre-existing condition applies, the enrollee CANNOT have
more than how many days' gap in health insurance? - ANSWER-63
A business will typically use which type of life insurance to cover their employees? -
ANSWER-Group policy
Within how many days must a Traditional IRA be rolled over to another IRA in order
to avoid tax consequences? - ANSWER-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? - ANSWER-$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? - ANSWER-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? - ANSWER-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 - ANSWER-universal life
, What is issued to each employee of an employer health plan? - ANSWER-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? - ANSWER-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 - ANSWER-marital status
A licensee who is required to take continuing education MUST include how many
ethics coursework hours? - ANSWER-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) -
ANSWER-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? - ANSWER-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, -
ANSWER-the protection ends
When the insured gives birth, coverage for eligible newly born children consists of
coverage of injury or sickness including - ANSWER-birth abnormalities
Which of these is NOT considered to be a purpose of an annuity? - ANSWER-
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? - ANSWER-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? - ANSWER-can be converted to
permanent coverage without evidence of insurability
Life insurance policies will normally pay for losses arising from - ANSWER-
commercial aviation
Correct Answers
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? -
ANSWER-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. - ANSWER-1
How many employees must an employer have for a terminated employee to be
eligible for COBRA? - ANSWER-20
Which of the following policies does NOT build cash value? - ANSWER-Term
CORRECT: straight life, endowment, variable life
Which type of annuity stops all payments upon the death of the annuitant? -
ANSWER-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 -
ANSWER-responsible third party
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.
Coordination of Benefits regulation applies to all of the following plans EXCEPT -
ANSWER-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? - ANSWER-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? - ANSWER-$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
- ANSWER-6 months
Statements made by an insurance applicant on an application are considered to be -
ANSWER-representations
To receive proceeds from a death benefit, a minor - ANSWER-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? - ANSWER-
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 - ANSWER-twisting
In determining whether a pre-existing condition applies, the enrollee CANNOT have
more than how many days' gap in health insurance? - ANSWER-63
A business will typically use which type of life insurance to cover their employees? -
ANSWER-Group policy
Within how many days must a Traditional IRA be rolled over to another IRA in order
to avoid tax consequences? - ANSWER-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? - ANSWER-$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? - ANSWER-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? - ANSWER-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 - ANSWER-universal life
, What is issued to each employee of an employer health plan? - ANSWER-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? - ANSWER-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 - ANSWER-marital status
A licensee who is required to take continuing education MUST include how many
ethics coursework hours? - ANSWER-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) -
ANSWER-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? - ANSWER-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, -
ANSWER-the protection ends
When the insured gives birth, coverage for eligible newly born children consists of
coverage of injury or sickness including - ANSWER-birth abnormalities
Which of these is NOT considered to be a purpose of an annuity? - ANSWER-
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? - ANSWER-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? - ANSWER-can be converted to
permanent coverage without evidence of insurability
Life insurance policies will normally pay for losses arising from - ANSWER-
commercial aviation
