XCEL NEVADA FINAL EXAM
QUESTIONS WITH CORRECT
ANSWERS
Which statement is true regarding a minor beneficiary?
Normally, the death proceeds are required to be held in trust until the beneficiary
reaches the age of 21
Normally, a guardian is required to be appointed in the Beneficiary clause of the
contract
The minor must pay the debts of the Insured's estate before receiving any of the
proceeds
The minor is entitled to receive the death proceeds immediately - ANSWER-
Normally, a guardian is required to be appointed in the Beneficiary clause of the
contract
Under the ACA (Affordable Care Act), which is the following is NOT considered an
essential health benefit?
Ambulatory patient servies
Cosmetic surgery
Laboratory services
Prescription drugs - ANSWER-Cosmetic Surgery
An employee of 20 years recently retired at age 59 1/2. This employee's group life
contract can be:
converted to an individual permanent policy at an individual rate
converted to an individual permanent policy at a group rate
continued at an individual rate
continued at a group rate - ANSWER-converted to an individual permanent policy at
an individual rate
When must insurable interest exist for a life insurance contract to be valid?
Inception of the contract
Throughout the entire length of the contract
When the insured dies
During the contestable period - ANSWER-Inception of the contract
The insurer must provide a prospective buyer with a(n):
Buyer's Guide and Policy Summary
A.M. Best report
Actuarial table
copy of the application - ANSWER-Buyer's Guide and Policy Summary
An individual who purchases a Life annuity is given protection against:
inflation
the risk of dying prematurely
the risk of living longer than expected
,the risk of not having enough retirement income - ANSWER-the risk of living longer
than expected
Which of the following statements BEST describes the intent of a Coinsurance
clause in a Major Medical policy?
Discourages overutiliziation of the insurance coverage
Minimizes the need for deductibles
Discourages adverse selection
Minimizes the waiting period - ANSWER-Discourages overutiliziation of the
insurance coverage
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANSWER-Principal
What type of group insurance plan involves employees sharing the cost?
Contributory plan
non-contributory plan
qualified plan
non-qualified plan - ANSWER-Contributory plan
Within how many days must a licensee notify the Commissioner of a change in
address?
30
60
90
120 - ANSWER-30
A whole life insurance policy owner does not wish to continue making premium
payments. Which of the following enables the policyowner to sell the policy for more
than its cash value?
Cash surrender
Life settlement contract
Buy-sell arrangement
1031 exchange - ANSWER-Life settlement contract
Which of the following is required for insurance producer applicants who are required
to pass a written examination?
fingerprint-based criminal background check
Credit report
high school diploma
sponsoring insurance company - ANSWER-fingerprint-based criminal background
check
Which of these is NOT a characteristic of a Health Reimbursement Arrangement
(HRA)?
Employee funds the HRA entirely
Employer funds the HTA entirely
,HRA's can be offered with other health plans
HRA's allow reimbursement for eligible medical expenses - ANSWER-Employee
funds the HRA entirely
When an insured has the same disability within a specified time period and the
insurance company provides the same benefits without a new waiting period, the
second disability is covered under which of the following benefits?
Residual disability
Presumptive disability
Recurrent disability
repeat disability - ANSWER-Recurrent disability
According to the Affordable Care Act (ACA), a dependent child's eligibility status is
determined by
age
income
health
marriage status - ANSWER-age
Under which circumstance can a group life insurance policy be converted to an
individual policy?
Termination of employment
Reinstatement of policy
Amendment of certificate
Elimination of premiums - ANSWER-Termination of employment
J is an agent who recently told a claimant that his rights might be impaired if he does
not complete a release form within a specified time. What could this agent be found
guilty of?
Twisting
Defamation
Coercion
Rebating - ANSWER-Coercion
Inducing or attempting to induce any insured person through misrepresentation to
lapse, forfeit, or surrender insurance is:
rolling over
rebating
twisting
coercion - ANSWER-Twisting
Which of the following is NOT an unfair claim settlement practice?
Failing to acknowledge and act promptly with respect to an insurance claim
Compelling an insured to initiate a lawsuit by offering less on an insurance claim
Failing to accept or deny a claim within reasonable time after proof of loss is
submitted
Needing written documentation of claim details - ANSWER-Needing written
documentation of claim details
, An insurance company must clearly specify questions designed to obtain information
solely for marketing research:
only on health insurance applications
in any insurance transaction
only on property insurance applications
only when instructed to do so by the company - ANSWER-in any insurance
transaction
When does a life insurance contract become effective if the initial premium is not
collected during the application process?
After all medical and personal information has been evaluated
when insurer receives initial premium from the producer
When producer delivers policy and collects initial premium
After application has been approved by the underwriters - ANSWER-When producer
delivers and collects initial premium
An individual life insurance policy issued in Texas must have a grace period for
premium payment of how many days?
20
25
30
31 - ANSWER-31
Which premium schedule results in the lowest cost to the policyowner?
Semi-annual
Monthly
Quarterly
Annual - ANSWER-Annual
Which of these is an element of a Variable Life policy?
A fixed, level premium
Insurer assumes the investment risk
No investment risk to the policyowner
Rate of returns are guaranteed - ANSWER-A fixed, level premium
D needs life insurance that provides coverage for only a limited amount of time while
also paying the lowest possible premium. What kind of policy is needed?
Limited-Pay life
Grade premium
Level term
Endowment - ANSWER-Level term
K applies for a life insurance policy on herself and submits the initial premium with
the application. She is given a receipt by the agent stating that coverage begins
immediately if the application is approved. What kind of receipt was used?
Binding
Initial Premium
Conditional
Contingent - ANSWER-Conditional
QUESTIONS WITH CORRECT
ANSWERS
Which statement is true regarding a minor beneficiary?
Normally, the death proceeds are required to be held in trust until the beneficiary
reaches the age of 21
Normally, a guardian is required to be appointed in the Beneficiary clause of the
contract
The minor must pay the debts of the Insured's estate before receiving any of the
proceeds
The minor is entitled to receive the death proceeds immediately - ANSWER-
Normally, a guardian is required to be appointed in the Beneficiary clause of the
contract
Under the ACA (Affordable Care Act), which is the following is NOT considered an
essential health benefit?
Ambulatory patient servies
Cosmetic surgery
Laboratory services
Prescription drugs - ANSWER-Cosmetic Surgery
An employee of 20 years recently retired at age 59 1/2. This employee's group life
contract can be:
converted to an individual permanent policy at an individual rate
converted to an individual permanent policy at a group rate
continued at an individual rate
continued at a group rate - ANSWER-converted to an individual permanent policy at
an individual rate
When must insurable interest exist for a life insurance contract to be valid?
Inception of the contract
Throughout the entire length of the contract
When the insured dies
During the contestable period - ANSWER-Inception of the contract
The insurer must provide a prospective buyer with a(n):
Buyer's Guide and Policy Summary
A.M. Best report
Actuarial table
copy of the application - ANSWER-Buyer's Guide and Policy Summary
An individual who purchases a Life annuity is given protection against:
inflation
the risk of dying prematurely
the risk of living longer than expected
,the risk of not having enough retirement income - ANSWER-the risk of living longer
than expected
Which of the following statements BEST describes the intent of a Coinsurance
clause in a Major Medical policy?
Discourages overutiliziation of the insurance coverage
Minimizes the need for deductibles
Discourages adverse selection
Minimizes the waiting period - ANSWER-Discourages overutiliziation of the
insurance coverage
Which of these is NOT a type of agent authority?
Express
Implied
Principal
Apparent - ANSWER-Principal
What type of group insurance plan involves employees sharing the cost?
Contributory plan
non-contributory plan
qualified plan
non-qualified plan - ANSWER-Contributory plan
Within how many days must a licensee notify the Commissioner of a change in
address?
30
60
90
120 - ANSWER-30
A whole life insurance policy owner does not wish to continue making premium
payments. Which of the following enables the policyowner to sell the policy for more
than its cash value?
Cash surrender
Life settlement contract
Buy-sell arrangement
1031 exchange - ANSWER-Life settlement contract
Which of the following is required for insurance producer applicants who are required
to pass a written examination?
fingerprint-based criminal background check
Credit report
high school diploma
sponsoring insurance company - ANSWER-fingerprint-based criminal background
check
Which of these is NOT a characteristic of a Health Reimbursement Arrangement
(HRA)?
Employee funds the HRA entirely
Employer funds the HTA entirely
,HRA's can be offered with other health plans
HRA's allow reimbursement for eligible medical expenses - ANSWER-Employee
funds the HRA entirely
When an insured has the same disability within a specified time period and the
insurance company provides the same benefits without a new waiting period, the
second disability is covered under which of the following benefits?
Residual disability
Presumptive disability
Recurrent disability
repeat disability - ANSWER-Recurrent disability
According to the Affordable Care Act (ACA), a dependent child's eligibility status is
determined by
age
income
health
marriage status - ANSWER-age
Under which circumstance can a group life insurance policy be converted to an
individual policy?
Termination of employment
Reinstatement of policy
Amendment of certificate
Elimination of premiums - ANSWER-Termination of employment
J is an agent who recently told a claimant that his rights might be impaired if he does
not complete a release form within a specified time. What could this agent be found
guilty of?
Twisting
Defamation
Coercion
Rebating - ANSWER-Coercion
Inducing or attempting to induce any insured person through misrepresentation to
lapse, forfeit, or surrender insurance is:
rolling over
rebating
twisting
coercion - ANSWER-Twisting
Which of the following is NOT an unfair claim settlement practice?
Failing to acknowledge and act promptly with respect to an insurance claim
Compelling an insured to initiate a lawsuit by offering less on an insurance claim
Failing to accept or deny a claim within reasonable time after proof of loss is
submitted
Needing written documentation of claim details - ANSWER-Needing written
documentation of claim details
, An insurance company must clearly specify questions designed to obtain information
solely for marketing research:
only on health insurance applications
in any insurance transaction
only on property insurance applications
only when instructed to do so by the company - ANSWER-in any insurance
transaction
When does a life insurance contract become effective if the initial premium is not
collected during the application process?
After all medical and personal information has been evaluated
when insurer receives initial premium from the producer
When producer delivers policy and collects initial premium
After application has been approved by the underwriters - ANSWER-When producer
delivers and collects initial premium
An individual life insurance policy issued in Texas must have a grace period for
premium payment of how many days?
20
25
30
31 - ANSWER-31
Which premium schedule results in the lowest cost to the policyowner?
Semi-annual
Monthly
Quarterly
Annual - ANSWER-Annual
Which of these is an element of a Variable Life policy?
A fixed, level premium
Insurer assumes the investment risk
No investment risk to the policyowner
Rate of returns are guaranteed - ANSWER-A fixed, level premium
D needs life insurance that provides coverage for only a limited amount of time while
also paying the lowest possible premium. What kind of policy is needed?
Limited-Pay life
Grade premium
Level term
Endowment - ANSWER-Level term
K applies for a life insurance policy on herself and submits the initial premium with
the application. She is given a receipt by the agent stating that coverage begins
immediately if the application is approved. What kind of receipt was used?
Binding
Initial Premium
Conditional
Contingent - ANSWER-Conditional
